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STANDING COMMITTEE ON
THE ECONOMY
Hansard Verbatim Report
No. 15 – May 7, 2013
Legislative Assembly of Saskatchewan
Twenty-Seventh Legislature
STANDING COMMITTEE ON THE ECONOMY
Mr. Don Toth, Chair
Moosomin
Ms. Danielle Chartier, Deputy Chair
Saskatoon Riversdale
Mr. Fred Bradshaw
Carrot River Valley
Ms. Jennifer Campeau
Saskatoon Fairview
Mr. Larry Doke
Cut Knife-Turtleford
Mr. Bill Hutchinson
Regina South
Ms. Victoria Jurgens
Prince Albert Northcote
Published under the authority of The Hon. Dan D’Autremont, Speaker
STANDING COMMITTEE ON THE ECONOMY 307
May 7, 2013
[The committee met at 19:00.]
Ms. Ursulescu: — Good evening, committee members. My
name is Stacey Ursulescu, and I’m your Committee Clerk.
Unfortunately our Chair and Deputy Chair are not able to attend
tonight and so the committee will need to elect an Acting Chair
for this meeting. So as Committee Clerk, it is my duty to
preside over the election of an Acting Chair.
First I will call for nominations and then, after that, I will call
for an actual motion. So I will take a nomination. I recognize
Mr. Doke.
Mr. Doke: — I move:
That Bill Hutchinson be elected to preside as Acting Chair
of the Standing Committee on the Economy for the
meeting of May 7th, 2013.
Ms. Ursulescu: — Are there any further nominations? Seeing
none, Mr. Doke, I’ll ask you to read that into the record again.
Mr. Doke: —
That Bill Hutchinson be elected to preside as Acting Chair
of the Standing Committee on the Economy for the
meeting of May 7th, 2013.
Ms. Ursulescu: — Is that agreed?
Some Hon. Members: — Agreed.
Ms. Ursulescu: — Carried. Then I’ll ask Mr. Hutchinson to
take the Chair.
The Acting Chair (Mr. Hutchinson): — Thank you, Madam
Clerk, and thank you for your confidence, members of the
committee. Now the first thing I’d like to say is that we have a
lot of work to do this evening and I think we’d be a little bit
more comfortable if we were able to take off our jackets. And
so I’ll suggest that possibility to anybody that would like to take
advantage of it. And I’m going to start myself — lead by
example.
So colleagues, tonight we’re going to resume our consideration
of the estimates for the Ministry of the Economy. This is vote
23, central management and services, subvote (EC01). I would
like to offer the minister a chance to introduce his officials and
make any opening comments that he wishes.
General Revenue Fund
Economy
Vote 23
Subvote (EC01)
Hon. Mr. McMillan: — Well thank you, Mr. Chair. And thank
you to the committee for the work that’s ahead of us tonight.
I’m pleased to appear before the Standing Committee of the
Economy to consider the estimates for Energy and Resources
under the authority of the Ministry of the Economy and
Tourism Saskatchewan subvotes.
Sitting to my right is Kent Campbell, the deputy minister of the
Economy; and to my left is Denise Haas, chief financial officer
for the ministry. In the row directly behind me is Ed Dancsok
the assistant deputy minister of petroleum and natural gas; Hal
Sanders, assistant deputy minister of mines, lands, and resource
policy; and Pat Fiacco, the chief executive officer with Tourism
Saskatchewan. There are a number of other officials here that
will assist in answering questions and provide information as
part of this evening’s conversation.
Mr. Chairman, no matter where you look in this province, you
will find new businesses, new people, new homes, and new
opportunities. These are all indications of a growing and
prosperous Saskatchewan, one that is moving forward with
great optimism and strength. Central to our prosperity is fiscal
responsibility. Once again, this government has a balanced
budget, and once again we are finding ways to move
Saskatchewan forward while preparing to tackle the challenges
that come with this level of growth.
The principal sectors and industries that comprise this economy
are helping to create a financial landscape that provides benefits
for all the people of this province. Tourism, mining, and oil and
gas are all important contributors to our government’s coffers.
Each year, hundreds of thousands of people flock to
Saskatchewan to enjoy the pristine lakes, picturesque
landscapes, and recreational activities, and to experience
Saskatchewan’s rich cultural and history that it has to offer. As
a newly minted treasury board Crown, Tourism Saskatchewan
will continue to play an integral role in ensuring that the
government’s tourism initiatives and objectives are being met.
Our natural resource strengths are being recognized around the
world. We have a mining industry that is the envy of Canada, a
treasure trove of uranium deposits and potash resources, along
with many other minerals, and an oil and gas industry that has
broke production records in 2012. There is no doubt that
Saskatchewan has what the world needs.
Coveted commodities like potash are helping to feed a hungry
world, while uranium is powering homes and cities and
providing research opportunities here in Canada and in the far
reaches of the globe. We have potash companies investing new
money into new mines, and a total of $13.8 billion forecast to
be spent in existing mines over the course of the next decade.
And we have a new uranium royalty structure which we believe
will have a myriad of positive effects on the mining industry.
Our government has taken steps to streamline the staking
process for issuing mineral permits, claims, and leases through
our new mineral administration registry of Saskatchewan or the
MARS system, which was launched late last year.
We also have an oil and gas industry that has unbelievable
potential. This province is the second largest oil producer and
the third largest gas producer in Canada. Our oil industry saw
record production in 2012 with a total of 172.9 million barrels
produced. Total value of oil and gas for the province was $12.5
billion. An estimated 4.7 billion was funnelled into new
exploration and development in this industry in 2012. And a
total of 3,208 oil wells were drilled last year.
308 Economy Committee May 7, 2013
Saskatchewan is a leader in oil and gas technology, including
enhanced oil and gas recovery methods, horizontal drilling, and
fracturing. And our government is a major proponent of the
Keystone XL pipeline and any other access to new markets for
our oil and gas.
If approved, the Keystone XL pipeline will free up capacity,
helping bring jobs, investment, and money into our province.
We are also modernizing the province’s oil and gas business
processes and computer systems through the process renewal
and infrastructure management enhancement program, or the
acronym would be PRIME.
Mr. Chairman, it is integral that our oil and gas and mining
industries continue to expand, helping to carry Saskatchewan’s
strong economy into the future. This is why building upon our
natural resource strengths was one of the many initiatives
highlighted in our government’s latest growth agenda, the
Saskatchewan plan for growth.
This budget made improvements in Saskatchewan’s uranium
royalty structure. This new structure now recognizes actual
costs incurred by industry and moves from a three-tiered system
to a two-tiered system. We believe these changes will have a
significant effect on production and the development of new
mines in this province. Over the course of the next 14 years it is
expected that uranium royalties will exceed $5 billion. Further
to this, the ministry’s budget includes a decrease in the
Saskatchewan resource credit, reducing a quarter percentage
point from 0.75 per cent. This will bring in an additional 22.3
million in revenues to the province in 2013-14.
The ministry’s budget also earmarks a total of 500,000 addition
dollars for Saskatchewan’s oil and gas industry, which will be
invested in regulatory oversight, and it includes 15.2 million to
be spent on tourism initiatives in the province.
Mr. Chair, the Ministry of the Economy is committed to a
vibrant economic future for all of Saskatchewan’s citizens. By
supporting economic diversity, the ministry is ensuring
prosperity can be realized for many years to come. With these
brief comments, Mr. Chair, I would be pleased to answer any
questions that the committee might have in regards to the
estimates before us tonight.
The Acting Chair (Mr. Hutchinson): — Thank you for your
comments, Minister. We certainly welcome them and we are
now available for questions. I ask just two things: that the
questions pertain to the matters there so that they’re in order;
and that any disagreements that occur, and they might, be done
in a collegial and respectful fashion. Thank you.
Mr. Belanger: — Well thank you very much. I’ve got a few
questions. And obviously there’ll always be disagreements. But
the one point I want to raise here is that my particular
constituency, as you’re aware, is in northwestern Saskatchewan,
with its great opportunity.
And we talk about natural gas. We talk about uranium
development. We talk about things like biomass such as peat
moss or wood biomass, like some of the opportunities attached
to that. And I want to spend a bit of my time in that particular
area, and the reason being is that obviously there are people out
there that are keenly interested in becoming part of a mineral or
resource development strategy, you know, for the province
overall.
And I’m keying on your point when you raised that your
objective is to see that all Saskatchewan people benefit from the
resource activity and the resource opportunity attached to our
lands. And certainly I think people aspire in northern
Saskatchewan to be part and parcel of that economy, because
too often we hear of the unemployment rates for First Nations
and Métis people and northern people in general. They’re not
something that we should be certainly highlighting on a national
stage. There’s more work that needs to be done, more
aggressive work.
So on that front there are a lot of people in northern
Saskatchewan — and I’m talking about municipal associations,
whether they’re development corporations or whether they’re
band-owned business entities — that are constantly looking for
opportunity. But when it comes to northern Saskatchewan, just
following the northern administration district just for
administrative purposes tonight, how significant are the natural
gas opportunities in northern Saskatchewan? Are they
significant? How do they compare to the rest of the province?
How do they compare to the hot spots, say for example the
Bakken play?
These are some of the things I think people want to know. And
based on the information that you have, what type of
information can you give me? And if you can break it down
between the Northwest, which is primarily anything west of
Pinehouse, versus the Northeast, which is La Ronge and
anything east as far as the borders. And of course the territory
border in the absolute North. These are some of the things that a
lot of people want to know. So I’ll leave that first question to
you.
Hon. Mr. McMillan: — Mr. Chair, and to Mr. Belanger. I
guess specifically to your question of natural gas in northern
Saskatchewan, my riding and yours butt up together on the
northwest corner. And at the very north part of my riding we
certainly — around the Pierceland and up north even of
Meadow Lake Provincial Park, right where our two ridings
meet — there is substantial gas reserves in there, and a certain
amount of production.
As we go north of that any distance, it really . . . there is no
production or no current exploration, not saying that there
couldn’t be development as we go forward. On the east side,
again in the northern administrative district, on the east side
there’s currently no production of natural gas on that side.
[19:15]
I know in your preamble to your question you talked about the
jobs in northern Saskatchewan, those opportunities. We
certainly have some very interesting potential and current
development in the uranium. You mentioned the peat industry
and the biomass, forestry.
One specific to the Northwest is the oil sands potential that in
the last year has shown a great amount of opportunity and
potential further development that we’re very hopeful that . . .
May 7, 2013 Economy Committee 309
We know the resource is there. We know that the opportunities
are there. And it’s a matter of technology and capital catching
up with the opportunity we see ahead of us.
So I’m happy to answer further questions, certainly in those
regards, about that part of the province, if the committee is
interested.
Mr. Belanger: — Yes, absolutely. I think the people that have
the information and knowledge of the oil sands, and of course
the natural gas activity in our area is where I’d like to go.
Because obviously I think on the east side there may be limited
opportunity, whether it’s because the availability or the
investment is not there of gas activity in general. So I certainly
want to spend a bit of time on the northwest part of
Saskatchewan. That’s the northwest corner.
I know that there was a lot of activity with the Oilsands Quest.
And we actually took a couple of tours of the actual exploration
camp and then of course the surrounding area, and saw a lot of
promising developments and opportunities.
But the big thing with the Oilsands Quest — and you can
correct me if I’m wrong — a lot of people generally say look,
Fort McMurray with all of its activities is probably 70 to 80
miles from, say, Buffalo Narrows or La Loche as the bird flies.
So you can’t have all that activity 70 miles away and not expect
any activity in our area. That’s the argument that I hear all the
time. And the oil doesn’t stop at the border. You know, we have
these compelling arguments.
And I have some background information, and I just want you
to confirm if it’s true or not based on some of your information,
because obviously your department would have a lot of that
information handy. But is it true to say that, based on the
geography of Saskatchewan, even the 70 to 80 miles difference
between Fort McMurray and La Loche say as an example, that
the overburden on the Saskatchewan side is much greater than
that in the Fort McMurray area? Is that a legitimate argument
that some people make when they do the comparisons?
Hon. Mr. McMillan: — Mr. Chair, a bit of an update on the oil
sands work that’s currently going on. As the member pointed
out, Oilsands Quest had developed a certain amount of property
there. Those assets this past year went through a legal process
and a successful bidder of Cenovus is now the owner of those
assets. Also in this past year, in December’s land sale, we saw
two permitted areas taken up in that land sale. The Cenovus
property, which they got through their process, is a total of
43,000 acres of land that Oilsands Quest had done a certain
amount of drilling on and development work on. These two
permit areas are a total of 478,000 acres — very large
properties.
But relative to the size of the entire reserve that has been shown
so far, the oil sands area in Saskatchewan is a total so far —
with exploration it may increase — but of 27,000 square
kilometres where oil sands is present in Saskatchewan. Now of
course portions of that are going to be economical, we would
expect, at some point for development. Portions of that are
likely not going to be economical, but it is a substantial portion
of the northwest part of our province that has potential for this
development.
Now, specific to the member’s question about the overburden
and the differences between Fort McMurray and what we have
where the Oilsands Quest property is, at Fort McMurray . . . I
guess in Alberta in general there’s two types of oil sands
development. There’s the stuff right around the Athabasca
River where it’s right at the surface. They’re doing surface
mining. The majority of the development in the oil sands in
Alberta is actually in situ, where on the surface it’s just a couple
of wellheads where they inject steam in one and the steam
pressurizes the formation, pushing the oil back out and
liquefying it. And that would be the majority of the
development in Alberta even.
Now in northern Alberta, they have developed far and wide
around Fort McMurray, finding opportunity. An interesting one
is Cenovus, who bought the Oilsands Quest property, has a
property called Telephone Creek that abuts against the
Saskatchewan border. And they’re currently in, I guess, the
development phase — I don’t know the appropriate
terminology — of their company, but they’re looking at
bringing that property into production that butts up against the
Saskatchewan border and butts up against the property they’ve
now purchased from the Oilsands Quest property.
Everywhere I guess you do resource extraction, there is a
certain amount of technology. Every mine, every oil well is
different to any particular part of our province or Canada than
anywhere else. And you have to adapt your technology to where
the water layer is, how thick it is, what your overburden is. In
the Telephone Creek area, we would expect that the technology
up to the border would be very similar to the technology that
would need to be developed from the Saskatchewan border
moving in. And we think that it’s a very . . . a good sign that the
company like Cenovus, who has a long history in Saskatchewan
using technology in the Weyburn-Midale field of CO2 for
enhanced oil recovery and really pushing the boundaries of
science to move our industry and the oil production forward.
They’re now utilizing that same technical expertise in a
completely different field in northern Alberta, and we think . . .
are very hopeful in Saskatchewan, the same technology will be
utilized there as well.
Mr. Belanger: — No, I think that the whole notion of the in
situ, where you simply inject steam down pipes to liquefy the
oil and pull it out from another pipe, that was . . . Is that easier
on the Alberta side primarily because they have natural gas or
because they have the facilities or the means to use the in situ
process to attract oil on the Alberta side? Because I’m assuming
that in situ means steam injection technology. And how do they
heat the steam? Is it through a natural gas process that we don’t
have on this side? Like, how does that work? Like, how do they
heat or how do they use . . . How do they inject steam down
there? How do they heat the water?
Hon. Mr. McMillan: — Mr. Chair, it just dawned on me
shortly after the member started asking his last question, I
didn’t actually answer his previous one. The depth of the
overburden on the Saskatchewan area around the oil, the
Cenovus property, is about 500 feet. So that’s a specific answer
to that question.
To the current question, the in situ technology, the utilization of
310 Economy Committee May 7, 2013
steam to heat and help pressurize the zone to produce the oil,
that same technology is currently used in Saskatchewan today.
In the Lloydminster oil field they utilize steam a great deal in
the heavy oil around the Pike’s Peak south location of Husky.
They’re using just that, using boilers with natural gas boilers to
heat steam to heat the oil, help it migrate, and produce oil.
So the technology on the creating steam, the pumping steam
isn’t necessarily a challenge. I would expect that the challenges
that Cenovus is currently working through with their Telephone
Creek property formation on whether the overburden is
appropriate to handle steam, all those types of issues are what
needs to be worked through. And they’re currently working
through it on their Alberta-side property.
Mr. Belanger: — It’s a very interesting issue, very interesting
topic because I’m trying to make the two, all the parts fit
together. So I’m saying, okay why are they having in situ
happening on the Fort McMurray side? Have they got facilities?
And obviously you say they use natural gas to create the steam.
Now it’s applied in Lloydminster, as you indicated. But how far
is Lloydminster from the . . . What’s the name of the field?
Sorry.
Hon. Mr. McMillan: — The oil sands on the . . .
Mr. Belanger: — Oilsands Quest property. Well now it’s
Cenovus. But it’s probably, I would say, 4 or 500 — maybe not
that far — but maybe 3 or 400 kilometres. So obviously they
don’t have the natural gas steam process available 3 or 400
kilometres north of Lloydminster, if it’s that. Maybe it’s a lot
less.
So my only argument is again I’m looking at the in situ process
that you’d probably employ on the Saskatchewan side. They
don’t have it available now, so I’m assuming that they’ll import
the technology and the services over the border to create the in
situ opportunity on the Cenovus property, which was formerly
Oilsands Quest. Is that a fair assumption to make?
Hon. Mr. McMillan: — I think that that’s a very reasonable
assumption to make, that the technology is going to be
transferable. It isn’t bound by one jurisdiction or the other. I
think the natural gas isn’t a barrier either, that for projects of the
size and scope we’re talking about, that infrastructure is in
place, again as you say, 80 miles away, between that property
and Fort McMurray, and the corridor would run north-south, so
likely far closer than that. Cenovus would be bringing in the
pipe and natural gas infrastructure to their property, which is far
closer.
I think, you know, why has the Alberta side developed in such
an aggressive way compared to the Saskatchewan side when we
both have oil sands potential? I think there may be geological
reasons of depth than they went after at Fort McMurray. It was
a very obvious place to start because it was right at the surface.
But as technology developed, it was employed further around
and they had shifted from not just surface mining but also to in
situ. I think that also over the last 50, 60 years, political climate
has paved an effect on where companies have chosen to invest
their capital, and our oil sands weren’t pursued with the same
vigour as possibly those to the west of us were.
[19:30]
Mr. Belanger: — Yes I certainly concur with the assessment
that perhaps on the Fort McMurray side, the proximity of the oil
sand deposit is probably a lot closer to the surface than on the
Saskatchewan side. And just by the visual or topographical
view, because I’ve flown from La Loche into Fort McMurray
and back three or four times, and as you leave Fort McMurray
— and I’ve left there in the evenings — and as you’re flying
home it’s only about a 45-minute flight at the most, if that, but
as you come to the border, you can actually literally see the
shimmering lakes. There’s a heck of a lot more lakes on the
Saskatchewan side of the flight home. Now one would assume,
okay, you have a lot of lakes. You’re going to assume there’s a
lot more overburden to provide the base of those lakes, so
obviously the in situ process is probably more problematic in
our area than it is in Fort Mac [Fort McMurray]. While
northeastern Alberta has a lot of lakes, I don’t think it has
anything compared to our lakes.
So when you talk about the potential challenge of injecting
steam, what it may do to not just to the ecosystem but to the
whole base of our land and Saskatchewan’s land, have you had
any consultation or any studies or any environmental
presentation as to what potential risks might be incurred or we
might have if we decide to look at the in situ process for a place
like Oilsands Quest property?
Hon. Mr. McMillan: — In regards to the oil sands and
environmental challenges that may be present, I guess a general
comment would be that our projects aren’t at a point where they
are looking to bring a major project into production. But before
they would, they would have to do a full environmental plan.
Our officials would have to do a full environmental assessment
of their process and of the challenges. We would learn from the
best practices done in similar technologies on the Alberta side,
and before any project could move forward it would have to
meet our very high and stringent standards for environmental
sustainability. That would be true of the oil and gas sector or
mining or really any of the extractive industries that we oversee.
Mr. Belanger: — Yes you hear a lot of the different . . . As you
visit different communities, you hear so many of different
perspectives of this particular, again going back to the, I guess
you call it the Cenovus property now. But when you do have
development happening, like for example in Fort McMurray, is
it true that, as you have a development, they’ve got to set a
certain amount aside for an environmental fund in which to
mitigate potential damages or threats to the environment
overall? Is there any truth to the fact that there is a fund set up
by . . . I’m assuming CAPP is part and parcel of the process, the
Canadian Association of Petroleum Producers. For the Fort
McMurray area, is there a fund set aside for environmental, an
environmental fund to prepare for any kind of damage to the
environment overall?
Hon. Mr. McMillan: — In regards to Alberta’s oversight or
funds they may have, that would fall obviously outside of our
purview or our area of expertise. What I can share with the
member is the Oilsands Quest property. There was a certain
amount of drilling that was done there of test wells that were
put in. Those would, and do, fall under our orphan well
program where wells set aside a portion of money for . . . if at
May 7, 2013 Economy Committee 311
some point in the future they need to be orphaned and orphaned
properly, that money is set aside.
Cenovus is obviously the owner of them and is responsible for
them, and is responsible for the reclamation and the
abandonment of them if that time ever comes. But if they were
no longer the owner, if any number of things happened, those
wells still have that money set aside now so that at some point
in the future, if they did need remediating, it could be done. So
that is in place here in Saskatchewan.
Mr. Belanger: — Just based on some of the checklist that you
may have in relation to development as a whole, indicating that
there is a certain standard from the environmental protection
perspective, so to speak, that you would have a rigorous process
in place that would protect the environment in the event that
there was a threat to that particular environment, then one
would assume that the oil or gas companies that are developing
the site would be the responsible party to mitigate those
damages and take care of the problem. Is that the approach you
would take as a minister and as part of the government, that the
polluter should be paying? Is that the approach you take now?
Hon. Mr. McMillan: — In regards to the responsibility of the
Energy and Resources, any company has to file with our
ministry their emergency measures response plan for any wells
or facilities that they have. And that plan would dictate how
they would handle any event, be it environmental or otherwise,
and how it would be dealt with.
Mr. Belanger: — Now if you look at the tar sands as a whole,
the activity of the Fort McMurray area, what kind of
environmental challenge would they present to Alberta?
Because obviously you have that much development, that huge
of a development, like what are some of the risks that one
would expect, based on your officials’ experience, from a
development of that sort? Like what would it do to the air?
What would it do to the flora and fauna? To the water? What
are some of the risks that one would expect from a project that
size?
Hon. Mr. McMillan: — In regards to Alberta and the
challenges of their development, I would leave those questions
for Alberta and what plans they have in place. In regards to any
development here in Saskatchewan, I’d be happy to answer any
of those questions.
Mr. Belanger: — The reason why I’m asking, just for your
information, is that there’s all kinds of rumours, and because of
the westerly winds, that we enjoy the pollution, so to speak, of
the Fort McMurray activity, where people are saying 70 per
cent of the pollution attached to the Alberta oil sands or the Fort
McMurray activity is being deposited on our land. So if I was
your neighbour and I had an incinerator in the back of my yard
and I was dumping all the soot on your property, then if
somebody went to see you, you wouldn’t say, well that’s my
neighbour, it’s his problem. It’s actually our problem. It’s
actually your problem.
So the rumour is that, based on the fact that CAPP is part and
parcel of what’s happening in Fort McMurray, they are under
this pressure to try and appear more environmentally friendly,
so they have all these commercials on TV. But is it true that in
Alberta and based on your experience with CAPP — again
going to CAPP because there’s people that belong to CAPP in
Saskatchewan — that there is a rumour that there’s a
multi-billion dollar environmental fund that the oil and gas
industry is sitting on that Saskatchewan could be taking
advantage of to mitigate some of the environmental degradation
that we are suffering as a result of the activity in Fort
McMurray?
Hon. Mr. McMillan: — In regards to again Alberta programs,
those would be questions better for the Alberta government. In
regards to the effects of their development on our environment,
the Ministry of the Environment has invested substantially over
several years in northern lakes monitoring and in a substantial
amount of work that in their estimates they could walk you
through very step by step exactly the work they’ve done and the
investments made to ensure that northern Saskatchewan
remains the great place that it is. But those would be better
questions for Environment.
Mr. Belanger: — But I guess based on your comment earlier
that you’re going to ensure that there’s a rigorous
environmental code attached to any project that your
department would permit, one would very easily assume that
you would be knowledgeable of the potential threats or risks to
the environment because obviously you’d have to be. So if
company A wants to come and develop a certain area for oil and
gas then you can’t say, well we don’t know what the
environmental risk is; go and ask the Environment. But we do
have this Environmental Code. So again I’ll ask the question:
what environmental risks, based on your department’s
understanding, would be associated with the oil and gas play in
an area such as northwestern Saskatchewan?
Hon. Mr. McMillan: — On any given project, depending on
how it was developed, the risks would be very different. And
even in the vast area in which our oil sands area is, it’s likely
that there would be different technologies utilized in different
areas. Based on what technology is used, the nature of depth, of
overburden, of all those pieces, there is likely different risks
with each of them.
My comment earlier was that any project that moves forward
would have to articulate, would have to have an environmental
plan, an environmental assessment, and those would be based
on their technology, their development plan. And with that we
would ensure that it met and was acceptable development here
in Saskatchewan, but it would be very specific to what and how
it was being developed.
Mr. Belanger: — And that’s my point, in the sense that you’ve
indicated that it’s important that we articulate the environmental
standards and code. So I’m assuming, when you want to
articulate the Environmental Code, that you’ll have intricate
details as to how you would do that. So I guess my question is,
do you have people within your department that would have the
environmental agenda, so to speak, to ensure that your code is
being met and that you are able to articulate with intricate detail
what environmental steps are necessary for the project to
proceed?
You wouldn’t just simply call the Department of the
Environment. I’m sure you would have the capacity within your
312 Economy Committee May 7, 2013
own department because obviously you’re espousing the
Environmental Code when it comes to development of oil and
gas.
[19:45]
Hon. Mr. McMillan: — To the member’s question, there is . . .
Certainly the responsibility would be, on the surface, it would
be the Ministry of the Environment and their oversight.
You speak of the Environmental Code. The Environmental
Code is the Ministry of the Environment’s document or it’s
under Ministry of Environment legislation and responsibility.
So that again would be better questions posed for the Ministry
of Environment.
Our oversight and the regulation we apply is on subsurface and
ensuring that that development was done in an appropriate and
sustainable manner. And that would be based quite specifically
on the geology of the formation, the technology that was being
utilized, and many other factors that would be specific to any
project.
Mr. Belanger: — But on a specific project basis — I’m trying
to wrap my head around this particular issue — am I to
understand that when it came to a project or you as a minister
said, we think this is a good project, we should proceed; and the
Environment minister says well no, it creates too many
environmental challenges, who would win that argument? Who
would overrule whom?
Hon. Mr. McMillan: — With these projects or any other
project, the project would have to have all of their
environmental work completed and approved before a project
could move forward.
Mr. Belanger: — And I certainly agree because I think, out of
all the ministers in general, I think the Ministry of the
Environment cannot be persuaded to political pressure or
otherwise to compromise the environmental integrity of what
they’re supposed to be protecting. So he would say no, it’s not
going to happen. It’s not going to happen.
So your point being or my point being that if there is some
serious challenges from the environmental perspective, that
opportunity has to be exercised through the Department of the
Environment. So in theory, again I’m not trying to trap you, I’m
just trying to make sure that when you say it has to be
environmentally sound, that responsibility is not yours. It’s the
Department of the Environment totally. Am I to understand that
correctly?
Hon. Mr. McMillan: — Again to delineate where those
responsibilities would lie, responsibilities for the air, the water,
or the land, those would be Ministry of the Environment, and
under the legislation that they have in place to govern the
environmental responsibilities they have.
Our responsibilities would largely be under The Oil and Gas
Conservation Act to ensure that they meet all the requirements
and approvals that we have. Those powers lie largely under that
Act.
Mr. Belanger: — And how many staff would you say you have
under that statute of that Act?
Hon. Mr. McMillan: — There would be 70 or 75 people that
are the responsibility for the regulatory oversight in that. The
Oil and Gas Conservation Act, The Pipelines Act would be two
of the pieces that would require the framework for the
regulation and oversight that they provide.
Mr. Belanger: — I’m pleased that there is that particular role
in the oversight that’s in place. Because obviously you look at
some of the discussions around pipelines and, you know, the
safety of the pipelines and, you know, the list goes on and on as
to the challenges, yet there’s great opportunity. So one has to be
very careful in that regard.
Is it public record as to . . . Okay, the one I would assume,
again, you’re looking at the Cenovus property. Is it common
practice for oil and gas companies to kind of put out what they
found, like in the event that they’re going to be selling the
property? Would they kind of advertise what they found? Is it
public record, like based on the test drill holes and their
activity? Because if I own a gas field and I show a lot of
activity, I want to show it off to the world. So if one of the
leaders of the North decided to say, well where is Cenovus
now? Where are the test holes? What have they found? Is that
readily available?
Hon. Mr. McMillan: — To the member’s question, if it’s an
exploratory well, they can hold that information privately for a
year. But after a year, that is information about the resource of
the people of Saskatchewan and it has to be made public. If it is
a production well, it’s only 30 days and that information is
made public.
In Saskatchewan we have our geological laboratory, which
houses over $1 billion worth of core information. And the
number that seems to come to my head is about 360 kilometres,
or 360 miles worth of cores if you lined all the cores in that
laboratory up end to end. So a substantial resource, substantial
amount of information. Interestingly, in the northern part of
Saskatchewan in the mining field, it’s three years in the
Athabasca Basin or for base metals where information is by law
made public after three years.
Mr. Belanger: — Would you be able to provide us a map of
those activities? Have you got a map available through your
department?
Hon. Mr. McMillan: — A map of the geological potential in
Saskatchewan?
Mr. Belanger: — No, just the activity surrounding the Cenovus
property.
Hon. Mr. McMillan: — Certainly we can provide the
committee with a map.
Mr. Belanger: — Okay. I’ll look forward to receiving that.
Hon. Mr. McMillan: — We could also provide the two
permitted areas that were taken in the December land sale, just
to give some context as to where that potential may lie as well.
May 7, 2013 Economy Committee 313
Mr. Belanger: — There’s not a lot of information on the
Cenovus well. We call it Cenovus now, but on the Oilsands
Quest property, you mention that they have a permitted area
478,000 acres. Or is that the total oil sands deposit in the
northwest part of Saskatchewan? I just want to be clear.
Hon. Mr. McMillan: — The Cenovus property is 43,000 acres.
The two permitted areas that were taken in the December land
sale, the two of them together total 478,000 acres. The total area
of the oil sands potential, where we know oil, where we know it
exists, is 27,000 square kilometres.
Mr. Belanger: — Now obviously Cenovus, the 478,000 acres,
would probably have all the information available to them.
They’re quite adept at figuring out where the oil is. So I’m
assuming that the vast majority of the potential for extracting
that oil and the volume of the deposit of oil is probably within
Cenovus’s claim.
Hon. Mr. McMillan: — It’s only 43,000 acres which is
Cenovus’s property. There’s . . . How many core holes were
drilled?
Mr. Dancsok: — About 325.
Hon. Mr. McMillan: — About 325 test wells that were drilled
there to define the resource. Those 325 wells are public, so
anyone could see exactly where, how deep the overburden is,
how thick the pay zone is. All that information is public today.
Mr. Belanger: — Good. I guess on the 43,000 acres that you
made reference to, did you sell the lease to them or did they
assume the lease from Oilsands Quest when you say that
Cenovus has this property now? So when you say the land sales
. . . Like did they buy it off the current government or did they
buy the rights off Oilsands and thus inherited those rights?
Hon. Mr. McMillan: — It went through a receiver process,
through a legal process. That’s how they acquired the assets.
Mr. Belanger: — And what would a 43,000-acre plot cost?
Like what did Oilsands first pay for it and what did Cenovus get
it for under the receivership bid?
[20:00]
Hon. Mr. McMillan: — Okay, I’ll try. I’ve got information
spread all over my page here. The original Oilsands Quest lease
or permit area was taken out as a claim. Being where it was at
that time there wasn’t . . . It didn’t come up in a land sale. It
was claimed just like you would claim an oil or a uranium or a
base metal claim at the time. That’s how Oilsands Quest
acquired it.
Through the receiver process, we understand that in October
2012 they acquired the asset for $10 million. To add a little
further information, the two permitted areas totalling 478,000
acres that I spoke of earlier, in the December sale it was $1
million to purchase those two claims.
Mr. Belanger: — That’s a stark difference between 43,000
versus 478, where you get 10 times what it cost you for 43,000
acres versus 478. And they paid $1 million for 478,000 acres?
Hon. Mr. McMillan: — I think the difference there would be a
couple-fold. The work, the 350 wells . . .
A Member: — 325.
Hon. Mr. McMillan: — 325 wells that are on the Oilsands
Quest has proven up a resource, and the initial claim that
Oilsands Quest took was substantially larger and they have to
revert back a certain amount of it over time. That took place to
what was then transferred. The two permits that were taken out
in December are at the larger permit stage. They don’t have any
value-added; no one has done any test drilling to prove up a
resource. So we’re kind of comparing apples and oranges to
compare the two, but I did want to provide the information just
for context.
Mr. Belanger: — No I think that information is very much
appreciated because people have to know how this basically
works. And I do agree that you are comparing apples and
oranges when you look at the difference in terms of exploration
and activity and information on one site versus a brand new
wider site.
Now what happens now with Cenovus? They paid a million
bucks for this 470,000 acres. How long does that give them
rights on that property? Is it for one year or is it two years or do
they have the right and option to renew next year?
Hon. Mr. McMillan: — Okay, I just want to be clear on the
two parcels of land. The 478,000-acre permit is not owned by
Cenovus. That is a permit that was taken by Scott Land & Lease
in the December sale. The Cenovus property is 43,000 acres.
Now the Cenovus property, they have 15 years to bring that into
production, and they pay an annual rent of $3.50 per hectare.
The permit on the 478,000-hectare Scott Land & Lease permit,
it is treated like a southern, any other oil property in
Saskatchewan. There’s five years to bring it into development,
to add value to it.
Mr. Belanger: — So in theory, like the five years, they pay $1
million. Is that each and every year, or is that 1 million for five
years?
Hon. Mr. McMillan: — It’s similar to any other land sale in
Saskatchewan. The land is put on the sale at the request of
industry. All industry can then look at it and bid on it, and the
successful bid was $1 million for the two parcels. So that is a
one-time bid price. They get it, and then they pay the $3.50
annual rent per hectare for the five years, at which point it
would either revert back to the Crown, to the people of
Saskatchewan, or . . . Oh work requirements is $1 per hectare
per year in addition, to maintain the land past the five years. So
to say this clearly, if they want to maintain that land in its
entirety, they would have to add $1 of value per hectare per
year on all 478,000 acres. So that’s a further work requirement
as well.
Mr. Belanger: — So based on $1 per hectare per year, what
would that translate for the 478,000 acres? Math wasn’t my
strong suit. How many acres in a hectare?
Hon. Mr. McMillan: — So in hectares, that permitted area is
197,000 hectares. So that’s $197,000 a year of work
314 Economy Committee May 7, 2013
requirement that they would have to add to it for five years to
maintain it in each of the years. And there’s no rent on that. It’s
just a work requirement over those five years, to clarify that.
Mr. Belanger: — So the five years — that’s what would make
up the $1 million? It’s not a $1 million land sale plus the
200,000? Is that correct?
Hon. Mr. McMillan: — Both.
Mr. Belanger: — Both. Okay.
Hon. Mr. McMillan: — The $1 million is a sale of the right to
have it for five years. And that is just cash, if you will, to the
people of Saskatchewan, to the GRF [General Revenue Fund].
The work requirement is the development of drilling, drilling
the property to define the resource. If they were to do that
200,000 for round figures per year, they would be able to
maintain it past the five years.
Mr. Belanger: — Now so if an Indian band and a couple of
communities got together and formed this energy company —
they want to look in oil and gas — you’re saying today that had
they made a bid for this property, had they paid a $1 million bid
plus the 200,000 per year to maintain the land for five years,
that they would have any development opportunities attached to
the 478,000 acres of land. Is that correct?
Hon. Mr. McMillan: — Yes.
Mr. Belanger: — Okay. Has there been any interest expressed
by any such company? Has there been any companies that have
had First Nations or municipal partners in that area as part and
parcel of any bid for property rights that this company currently
enjoys? I’m trying to see if there’s any interest out there.
Hon. Mr. McMillan: — There over time has been bids from
many different companies that are unsuccessful. We have a
threshold where we think it’s valued at, and if the value isn’t
reached it doesn’t go forward, from many different proponents.
When it’s a proponent like Scott Land & Lease, we don’t know
who the investor for the group behind the purchase would be.
At some point if it moves on to development, it is often
revealed that it’s a group, a community group or a larger player
that is bringing it forward.
My understanding is that several packages were, over the last
several years, have been put forward and have had unsuccessful
bids. Some of those may have had First Nations involvement.
Mr. Belanger: — So this company you mentioned, what was
its name of the company again and where are they from, the one
that got the lease?
Hon. Mr. McMillan: — They are based out of Calgary, we
understand. They have an office in Regina as well and they act
as a professional land agent for the energy industry.
Mr. Belanger: — Okay. So as an agent they can actually
acquire property rights on behalf of an oil and gas company.
They would look after all those particular aspects of securing
property rights. Is that correct?
Hon. Mr. McMillan: — That’s correct.
Mr. Belanger: — Now I want to head just a bit north if I can,
in relation, because I’ve got a few more questions on the oil and
gas sector itself. But no I think it’s important that a lot of people
understand how the process works. And the land sales I am
assuming go out in December of each year . . . or the interests.
Is that the correct time frame? Or is it on a monthly basis? How
does that work?
Hon. Mr. McMillan: — Land sales are done every two
months. First land sale is in February and then every two
months following that.
Mr. Belanger: — Now if I were to find, say I had an interest in
a certain piece of land that I think that there’s gold there. Now
as a northern person that lived in Ile-a-la-Crosse all my life and
I wanted to secure the rights to that property, how would I go
about doing that? Like how would it work? Would I have to
apply to SERM [Saskatchewan Environment and Resource
Management] or would I have to apply to your office? Like
when you mention staking versus land sales versus claims, you
know, that are done through a different process, generally how
does that work? So if I go and say I travel home today and I see
a nice glitter of gold on the side of the road and I want to stake
that land out for my company, is it that easy to get a hold of
your department and say, this is the area I want, and then all of
a sudden you have it? Is that how easy it works?
Hon. Mr. McMillan: — I guess the scenario that the member
put forward is about if we think there is gold in a piece of
property. That would fall not in the land sale as oil and gas
rights do, but under mineral claims regulations. I spoke earlier
about how Oilsands Quest was first acquired under a claim
system. It would be that same system. Now in the years since
Oilsands Quest acquired their property, we recognized our
potential in oil sands and have brought that in line with our
other oil potential in the more southern part of the province. But
that same principle that a claim was staked under is still the
effective system that we have for staking base metals, gold,
uranium.
And now if I was a citizen and I wanted to stake a claim, in
recent years we have changed the system from what had
traditionally been the system, going back to really when we
became a province, to putting it online and allowing people to
stake a claim on very high-quality digital maps. The process
you would have to go into is you have to register with the
ministry to make a claim, but once that’s done, you can go on a
computer anywhere in the world and stake a claim in
Saskatchewan. There is a fee for that, but that fee has actually
been diminished in the past year because by doing it
electronically, it is more efficient. And there is less cost to the
ministry, so we passed those savings off to the citizens as well.
[20:15]
Mr. Belanger: — So if I uncovered a gold find half a mile from
my home community, and I staked a claim saying that I want
three acres of this property and here’s my Visa, now that
permitting system would allow me to stake that area for gold
only — is that correct? — or any other minerals I might find.
May 7, 2013 Economy Committee 315
Hon. Mr. McMillan: — The potential gold deposit you found,
if you wanted to stake it, you’d go online. You would see a
digital map of that area. It would show any particular current
claim or anything that was not available, and you’d be able to
claim the portion you wanted that was free.
The system is . . . We have projected the township land system
that’s currently in use in southern Saskatchewan, in northern
Saskatchewan, and that same geographic framework is in place.
The smallest claim that you could take is a 40-acre claim, so
you’d get more than just the half acre you’d think that it’s in.
And the suite of minerals that you’d be able to mine would be
base metals, gold, uranium — really anything that’s currently
mined in northern Saskatchewan would fall to you. So if you
get underneath the gold and you find a great deposit of uranium,
you could harvest that as well.
Mr. Belanger: — Now the same principles would apply then.
So suppose I applied for 40 acres of land, thinking that there’s
gold there. Then I’d pay a permit fee. I wouldn’t mind knowing
what that fee was for 40 acres. And you would, like the oil and
gas companies attached to the Cenovus property, you would
have it for a five-year time frame provided you paid X amount
per year and you looked at opportunities to develop. Is that
true?
Hon. Mr. McMillan: — So if you have taken out your 40-acre
claim and you want to explore it, you can leave it in the claim
format. To keep it active, you have to do a certain amount of
development work to show that you’re not just tying up land
and not allowing it to be produced. If you want to actually start
producing the mine, you actually have to convert it to a lease.
And then a lease is for 21 years, and that’s to allow you to put
in the infrastructure you’d need to develop the mine and move
the project forward. We’re going to endeavour to get to you,
before tonight’s session ends, the exact amount of work that
you need to do each year to keep your claim active and the fee
that it would cost to take out that claim as well.
Mr. Belanger: — So I have the past activities of the Cenovus
property and that information that you will be forwarding to my
office, is that correct?
Hon. Mr. McMillan: — That’s right. We’ll get it to the
committee Chair, and they will pass it out to the committee
members. I think it’s likely we’ll get you this information by
the end of this evening’s sitting.
Mr. Belanger: — Would that information, for example, if some
company drilled for gold 30 years ago, would there be a history
attached to that particular property? Would that show on the
information that you would get?
Hon. Mr. McMillan: — Again, our geological laboratory
houses all that information. Any core hole that was ever drilled
is the property of the people of Saskatchewan. It’s kept in our
geological laboratory and anyone has access to it after the
proprietary year, I believe I said earlier, has expired.
Mr. Belanger: — I just want to spend a few more minutes on
the notion of the Primrose bombing range. There’s been a lot of
activity over the years to try and get access. The land obviously
is leased to the federal government for national defence
purposes. So they can arbitrarily overrule access to the property.
I think the base commander has more authority than the Premier
of Saskatchewan when it comes to that particular piece of land.
So that being said, there hasn’t been any recent activity on the
Primrose bombing range from any interested oil and gas
companies?
Hon. Mr. McMillan: — In regards to Primrose weapons range,
current statuses are 34 gas wells that were drilled in the
mid-’90s. The access agreement from that time expired in 2003.
There currently isn’t — now there’s still access to those wells
of course — but an updated access agreement with the federal
government we have not been able to attain.
Mr. Belanger: — That’s on the Saskatchewan side. It’s not the
Alberta side. Is that correct?
Hon. Mr. McMillan: — That is correct.
Mr. Belanger: — There was also a lot of discussions about the
fact that the property in question probably does hold a lot of
promise in terms of the volume. I’m not sure, I think it’s a
quarter of a million acres on the Saskatchewan side that
probably has a lot of potential for oil and gas. Correct me if I’m
wrong in terms of the acres. It might be a bit more. Is it 1.6
million acres total?
But anyway the risks attached to all the different types of
bombs and the unexploded and the dangerous basic problems
that one would have in going in there to explore for oil and gas,
that it presented too much of a risk for any oil and gas
company. Is that still the reason for not going into the bombing
range?
Hon. Mr. McMillan: — In regards to possible or potential
risks, our experience with the development that had taken place
there pre-2003 did not . . . There was not any events or
circumstances that were involving ordinance of any nature. We
have pursued a further access agreement with the federal
government. We’ve been unable to secure one, but the reason
that they have not been willing to negotiate another one would
be better questions of them than us.
Mr. Belanger: — Now one of the . . . I just want to quickly
spend a bit of time . . . Who’s basically your energy guy, the
gentleman who was directly behind you? I think he left. Oh, the
guy waving back. What’s his title, his name and title?
Hon. Mr. McMillan: — Hal Sanders, assistant deputy minister,
minerals, lands and resource policy.
Mr. Belanger: — Hal. Okay, sorry. Sorry, Hal. Now I suppose
the thing that really sticks out to me with your portfolio —
energy and mines — and right in the middle of that you have
Tourism Saskatchewan. You know, it doesn’t really fit, so to
speak. And I’m not saying that to be funny tonight. It just seems
an awkward fit. So suppose you have a really prime piece of
land that has a lot of oil and gas potential and yet that same
piece of prime land’s got huge, huge potential for tourism. Do
you kind of let Mr. Sanders and Mr. Fiacco go outside and
whoever comes back in wins the battle? How do you make the
decision when you have that kind of conflict of ideals?
316 Economy Committee May 7, 2013
Hon. Mr. McMillan: — I would see it otherwise. The tourism
industry is a $2 billion industry in our province, and it is from
border to border — north, south, east, and west. It leverages off
of our fantastic lakes, off of prairie landscapes, our history, off
of all those iconic tourism pieces that we all think of, the
camping. It also is driven in large part by the industry that we
speak of as well, that hotels in many of the small towns in
southeast Saskatchewan have been full for the last several years.
You see in Lloydminster new hotels being built. Today on the
Saskatchewan side, there’s two just right beside the highway
that are currently under construction. All of these are bringing
people to our province for other types of tourism other than the
iconic lakes. So I don’t think it’s one or the other. I think that
there are a lot of reasons that people are coming to
Saskatchewan to enhance our tourism industry.
[20:30]
Mr. Belanger: — No. I think it’s important, that kind of
position. You look at it. There is a conflict of ideals at times,
you know, because there’s obviously . . . You’ll run into that.
You know, and for the record, my money is on Sanders because
he has a mean left hook.
But anyway I think what’s really important is that if you look at
that particular conflict that might occur, and you look at the Far
North as an example where people in the Far North that get the
Athabasca River flow from the Fort McMurray area, they are
claiming that there’s huge degradation of their water quality and
threats to their fishing stock. And yet nobody seems to listen.
And yet you tour the Athabasca Sand Dunes, and you look at
the beautiful landscape out there and the crystal clear water,
there are some significant environmental risks to a great tourism
spot caused by Alberta. So what I didn’t know is that the Fort
McMurray river not only captures all of the waste attached to
the oil sands activity, but it also has four or five mills that also
dump their stuff into the river.
Now the Fort Chip people, if you look at that, and I spoke to a
police officer that was stationed there for a number of years. He
started developing some serious health problems, and they think
it’s attached to the water supply. So you have all this activity,
oil and gas and pulp mills, and yet you see the overflow — not
just the air quality problem and deposits on the land — but to
the water system that we share with Alberta. And this is the
stark contrast that I made reference to. I made light of it, but the
fact is there are those challenges. So sooner or later we’ve got
to figure out what we’re doing here and to use your phrase, to
cut the wheat from the chaff, if I said it right.
But in the Far North, Lake Athabasca, a beautiful piece of our
Saskatchewan land, they’ve got the sand dunes. They’ve got the
beautiful lakes. They’ve got tremendous tourism potential, but
it is being destroyed and degraded by the pollution that we’re
receiving from or through the Fort McMurray river system. So a
lot of the Athabasca Basin people are quite frankly really upset
that nothing is being done about that. So thus the question is,
how do we balance the environmental importance attached to
Tourism Saskatchewan versus the quick economic benefits of
oil and gas?
Hon. Mr. McMillan: — Now as far as the environmental
nature of northern Saskatchewan, as we’d spoke earlier, better
questions for our Ministry of the Environment who does a
substantial amount of water testing and water quality work in
northern Saskatchewan and would be able to walk you through
that fairly closely.
But in regards to the deposits in Lake Athabasca, that lake
actually flows from Saskatchewan into Alberta, and this is —
you may correct me because this is your backyard not mine —
but it was a year ago that I was in that area, and I may have
been turned around, but my understanding was that one flows
from Saskatchewan into Alberta, not the other way around.
Mr. Belanger: — You must’ve got turned around.
Hon. Mr. McMillan: — What’s the falls there right at the
eastern end of the lake, right by Black Lake . . . [inaudible
interjection] . . . It comes from Black Lake into Lake Athabasca
and then keeps heading towards the west. So if there’s any
pollution there, I think we’re sending it to Alberta, not the other
way around.
Mr. Belanger: — [Inaudible] . . . those falls. But the point
being is that, the point being is that I’m just saying it’s an odd
fit because you look at the oil and gas sector and you look at
Tourism Saskatchewan, and obviously there’s got to be some
clash of values from time to time. Like we don’t all live in this
or take a Pollyannaish view of how things could work. My only
point is that we have to ensure that both fronts are afforded
opportunities and that there is value on both fronts from the
economic perspective and a number of other perspectives as
well.
So my only point is that I think that we need to do something
about the pollution that is being deposited on our lands from
Fort McMurray and through our river system and through our
ecosystem. And the whole thing is that it’s nice to see them
enjoy the bounty of their oil and gas exploration, but it’s
another thing that when they’re polluting our particular lands
and stifling opportunity for tourism, that we ought not to simply
shrug it off and say, this is an environmental issue. It doesn’t
really affect me. In many ways it does because of Tourism
Saskatchewan in your backyard or within your portfolio. I think
it has everything to do with holding people that are polluting
our lands to account for why they’re doing that.
Hon. Mr. McMillan: — And I would concur that any
development that falls under the oversight of our ministry we
need to ensure and we do ensure that it meets our high and
rigorous standards for sustainability and environmental
sustainability, not just for the tourism aspect but because that’s
the expectation of the people of Saskatchewan of any
development in our province. But again I would say that on the
tourism side, having a strong and robust industry in oil and gas,
in potash, in uranium, has truly driven our tourism numbers in
recent years.
As I said earlier, it’s a $2 billion industry. It’s the restaurant
meals that are feeding the rig crews that our going out. It’s the
surveyors. It’s the seismic crews. All of those are filling our
hotels and helping fuel our tourism industry because we have a
robust and advanced resource-based economy as well.
May 7, 2013 Economy Committee 317
Mr. Belanger: — Okay. Thank you very much. My colleague
has about another half hour of questioning. He wants to get a
few questions with you. And then following that, I think we’re
going to Water. So thank you very much, and thanks to your
officials. And as I indicated, my money’s on the Senators.
The Acting Chair (Mr. Hutchinson): — Thank you. We
recognize Mr. Wotherspoon.
Mr. Wotherspoon: — I’ve got a few different areas, Mr.
Minister, I’d like to touch. And thank you to all the officials
that are here with you here tonight. The first one would be as it
relates to surface rights, and I’m interested as to whether you’re
planning as a ministry to be renewing or overhauling The
Surface Rights Acquisition and Compensation Act.
Hon. Mr. McMillan: — The quick answer to that is yes. I’ve
stated publicly that we’re currently working on it today, that
we’ll be consulting with stakeholders over the next few months.
And we think that the oil industry has changed in the last 30
years. The farming industry has changed in the last 30 years and
that we need to ensure that our legislation keeps up with those
changes, that the principles that have been put in place, they
need to certainly be maintained, but they need to reflect the
changes in those industries. And we are currently undertaking
the work to ensure that that review and any possible changes
happen in a timely manner.
Mr. Wotherspoon: — Thank you. And that’s good that it’s
going to be worked on, as well recognizing I think just the
changes. This is an Act from 1968, and I know you’re very
familiar with the changes in the industry and the technologies
that are being utilized and deployed through those oil fields and
then of course the change in agricultural practice and
landownership as well. And some modernization of that Act is
going to be very important.
Now do you have a timeline on that process? And as well with
that timeline, who do you plan to have engaged by way of
consultation?
Hon. Mr. McMillan: — The timeline I have spoken about
publicly, and it is that consultation will happen over the next
several months. I have also said publicly and believe that many
of the stakeholders have an agricultural background. Many of
them are active farmers, and we know well that when you deal
with people that are so involved in that industry, you don’t
consult during harvest and you don’t consult during seeding,
that you ensure that you find a time either between those two or
after.
So our goal at this point is to reach out following the seeding
and ensure that we get meaningful consultation. So who?
Obviously the stakeholders such as SARM that represents every
rural municipality in our province. Landowners that have been
engaged with the oil industry for several years will have very
meaningful contributions, I would expect. Industry that operates
in our province will certainly, I would expect, want to put
forward what they see as working or as challenges. So truly
both parties that are governed by that Act need to be able to put
forward where they think it can be improved.
Mr. Wotherspoon: — Thank you for that. As it relates to some
of the landowners or the surface rights holders, recognizing that
oil in your region, up in that heavy oil, and the methods to
extract and the industry itself is much different than it is in
other parts of the province — certainly in the Southeast with the
Bakken fields — I believe that making sure that that
consultation is authentic to each of those regions is going to be
important.
And the one group that I recently had the privilege of meeting
with, and I believe you did as well, Minister, was the Southeast
Surface Rights Association. They brought forward a brief with
some of the concerns. They see also some solutions, a lot of
them very practical. I’m wondering if at this point in time if the
. . . Certainly I would suspect the minister is going to be
working with the surface rights association through this
consultive process. Maybe just to place that onto the record.
And then also seeking if there’s any points from that brief or
that discussion that he can identify right now that he’d like to be
seeing as addressed.
Hon. Mr. McMillan: — They provided me with, I would
expect, a similar if not the identical brief that they provided the
member with. We discussed it in great detail. And no, there
were many things in there that . . . Well I think that their brief
was very reflective of their experience and very legitimate of
the ways they think it could be improved. I committed to them
that we would certainly be reaching out to them as we went
through the consultation period. Their members and their group
have been engaged in the farming industry and working with
the energy industry for a substantial period of time, and as the
brief showed, there was a lot of lessons learned and
improvements that they thought could be made.
Mr. Wotherspoon: — Yes. I couldn’t agree more that there is a
lot of common sense proposals in that brief. Is the minister
committed to working in a consultive way with an association,
certainly the Southeast Surface Rights Association, as a full
partner through this process?
Hon. Mr. McMillan: — As I said in my last answer, I
committed to them that when we sat down together we’d be
reaching out to them as we went through the consultive process.
Mr. Wotherspoon: — The one thing that I suspect they’d
appreciate, certainly the public may appreciate, is seeing a
formal response to the brief in due course. There may be more
analysis that’s required, but certainly I suspect they’d appreciate
hearing some of the positions of the ministry as it relates to that
brief. And certainly I’d appreciate, if privileged to be included
in that communication, just to see where some common ground
is achieved.
Hon. Mr. McMillan: — As I said, I met with him. We
discussed our brief in great detail, and as we go into the
consultative process, I’ll be reaching out and involving them.
Mr. Wotherspoon: — No. That’s great. We’ll track that
process as we go. And your list of the stakeholders — industry,
SARM [Saskatchewan Association of Rural Municipalities],
SUMA [Saskatchewan Urban Municipalities Association] —
they certainly should all be involved, certainly the landowners.
I didn’t hear of any environmental stakeholders. Certainly, you
318 Economy Committee May 7, 2013
know, when we’re thinking about flow lines and possible —
well not possible — the spills that occur through the process,
the saline spills, the other chemicals that are spilled through
these processes, do we have environmental stakeholders that
will be included as well, and who would those be?
Hon. Mr. McMillan: — As I say, we’re currently putting
together our process that we want to go through. Our intention
is to have a very broad consultative process that includes
anybody who wants to put forward comments should be able to
and will be able to. At this point we’re still working on how that
process is exactly going to look.
Mr. Wotherspoon: — Thank you. But you’ll be reaching out
actively to environmental stakeholders as well.
Hon. Mr. McMillan: — To all stakeholders that we think that
. . . To all stakeholders that we can identify as having comments
that they would want to put forward and providing an
opportunity for people that may want to provide comments that
wouldn’t be obvious to anyone. We think that everybody should
have access to putting forward thoughts in this regard.
[20:45]
Mr. Wotherspoon: — Do First Nations have any unique
interests in this process? Some of the lands I’m thinking of
through the Southeast, as well I think of a First Nation like
White Bear, there might be certainly value in engagement there
as well.
Hon. Mr. McMillan: — I think that that very potentially could
be very relevant.
Mr. Wotherspoon: — Well thank you. Thank you for those. I
appreciate your comments as well in a positive way about your
meeting with the surface rights association. I enjoyed the
meeting as well and certainly will be keeping track of the file
and appreciate any updates you can provide us as it relates to
your work on this front.
I’d like to touch just a little bit on the Prince Albert mill and get
a sense of where that project is at. I know I had some questions
for the Minister of the Economy last week, and he said take
them to you, Mr. Minister. So he said you were the guy with the
answers.
You know, I think it’s been . . . Of course this is a really
important piece to the economy throughout that entire region
and to our province as well. The Minister of the Economy was
recently up in Prince Albert and said that he was quite confident
that Paper Excellence, the current operation that’s operating this
mill, would work through I believe he called them hiccups and
were moving towards being operational. Just looking to you as,
I guess, direct minister responsible whether you share that
confidence.
Hon. Mr. McMillan: — A quick update from I guess from the
ministry’s point of view on this project. I would start off by
saying it’s a private company, Paper Excellence, which has
purchased the assets. They, from the time of purchasing it, have
committed that they want to open it. As recently as a couple of
weeks ago I believe, it was reported in the P.A. [Prince Albert]
Herald that their expected start date will be 2014. I think it’s
also been reported about $300 million worth of investment to
make that mill the type of mill that produces products that is
relevant for Paper Excellence, the owner of the mill.
The mill owners actually are currently operating the Meadow
Lake mill. Today it’s been in operation for a period of time.
And they’re also at their P.A. site currently producing about 10
to 15 megawatts of power, which is part of their long-term plan
and actually reduces some of the environmental liability that
has accrued over quite a period of time with the biomass it’s
built up. A portion of that I believe was accrued at a time when
the Government of Saskatchewan owned the mill, and that
liability was accrued to the Government of Saskatchewan. So
that’s a bit of an update, but this certainly is the private sector
that owns the mill and has a plan to move it forward.
Mr. Wotherspoon: — Right. But there’s a direct role and
responsibility of government to see the success of this project
and process. It’s really important to the region. And I know of
course your Ministry of the Economy has placed direct dollars
into training within that mill. The minister wasn’t very clear as
it related to where those dollars have gone for the training. I
believe there’s many within the community that are questioning
whether that investment has been made.
I know the concerns I’m hearing on the ground in P.A., sort of
through the business community and with the workers and
former workers, is that the $300 million that the minister
referenced that maybe 10 per cent of that has been expensed at
this point or has been delivered. Does the minister refute that, or
is that sort of where he would see the mill being at at this point?
Hon. Mr. McMillan: — I guess, you know, to again clearly
delineate responsibility, my understanding is that when Minister
Boyd was before this committee, the committee had substantial
questions for him on the training side, and skill development
and job readiness falls under Minister Boyd’s portfolio. And my
understanding is that those questions were answered to the
committee’s satisfaction.
On the business development, the P.A. pulp mill moving
forward, this is a private company that has bought assets, that
have committed to bringing it into production. I believe they’ve
set a date publicly of 2014. What this isn’t is the Government of
Saskatchewan hasn’t signed a large memorandum of
understanding. There isn’t government dollars in moving the
mill project forward. This is actually the private sector that
wants to be invested in our province and has currently made
investments and has made undertakings publicly to make
further investments in hiring people and providing value to the
products that are produced, to the raw materials that are grown
here in our province.
Mr. Wotherspoon: — I appreciate the important role of the
private sector in Saskatchewan, and certainly we have an
important role to ensure we have a strong profitable private
sector in Saskatchewan. In P.A. that’s a profitable operational
mill that we need to be working toward.
The question more specifically to the 10 per cent of that
investment, that’s an important one. What I’m hearing is that
that’s sort of maybe what they’ve made to this point. I also hear
May 7, 2013 Economy Committee 319
that there’s different components.
Now I don’t know the operation of a mill inside and out, but
I’ve been told that a press suction roll is absolutely vital to the
operation, and that’s 18 to 19 months away to be ordered, let
alone to be installed into that mill. MC [medium consistency]
pumps, high pressure feeders, all of these different components
that are required that I understand at best would be 18 months
away from being able to be received, I understand there’s some
question or a lack of understanding whether or not they’ve even
been ordered at this point.
So recognizing that the lion’s share of the investment hasn’t
occurred yet, that there’s impediments to upgrading equipment
that’s going to be required if this is going to be operational, I’m
just looking to the minister if you can give us a clarification as
to whether or not those facts are the case. And if not, I would
just urge the minister to put some oversight onto that file and be
updated as to the current status of that project and just being
able to communicate the timeline in a clear way to the public
and certainly to Prince Albert and area.
Hon. Mr. McMillan: — As I stated in my previous answer,
that as recently as a couple of weeks ago I believe the P.A.
Herald had stated that the expected start date is still 2014. I
believe they’ve already advertised for 41 employees to be hired
this summer, an additional 200 employees over the next couple
of years.
As for the member’s questions as to if specific pieces of
equipment have been ordered or not, you know, that’s
obviously the responsibility of this company who’s got active
mills in our province. I think . . . I’m confident that they know
all the components that need to go into any mill to meet the
requirements of the end product they want to produce. And I’m
also quite confident that this company that has mills around
North America and even beyond that, they know the order
times, the production times, the delivery times of the equipment
that they will be requiring, and that they will be making the
appropriate decisions that they need to.
As I said earlier, they’ve made undertakings, and as recently as
two weeks ago it’s been again reported in the P.A. Herald that
their start date is still 2014.
Mr. Wotherspoon: — It’s out of some of the . . . I was up in
Prince Albert coincidentally the same time as the minister —
and I had meetings into the next day as well — and he spoke to
the chamber of commerce there. And I know there was a lot of
concern within that business community about seeing that mill
being operational. They held a forum with that business
community the next day, and they certainly shared a lot of their
concerns around these technical components, that neither you or
I likely know well, but they seemed to be quite concerned about
the lack of activity on the ground, the lack of employment that’s
occurring, and what they would see as a lack of critical
investment that’s going to be required if this is going to be
realized.
I guess to the minister on another front: where’s he at in
determining whether or not there’s some concerns as it relates
to decisions of China and a potential trade barrier as it relates to
dissolving pulp?
[21:00]
Hon. Mr. McMillan: — A bit of an update in this regard. On
February 6, China launched an anti-dumping action against five
Canadian companies. Paper Excellence was not one of these
companies. They alleged that these companies were selling
dissolving pulp in the Chinese market at lower than world
prices. So that action does not capture Paper Excellence.
However if an action were to capture them, we are and have
been and will continue to be in contact with our federal
government and their trade officials with Paper Excellence to
work through this process and try and ensure that Paper
Excellence will not be impeded by any trade action, as we
would for any company or operation in Saskatchewan that’s
trying to operate on the world market.
Mr. Wotherspoon: — Okay. So right now, is it the minister’s
contention then that there’s not a concern that exists as it relates
to a potential trade barrier with China?
Hon. Mr. McMillan: — Currently we have no dissolving pulp
producers in Saskatchewan. The five that were named in the
action by the Chinese government, that action does not affect
any of our producers. If at some point in the future this Paper
Excellence were affected by this, this or another trade action,
there are several remedies that would be taken, one of which
would be the . . . There is a provision under the World Trade
Organization anti-dumping agreement for a new shipper review.
Paper Excellence could request this review if or when it plans to
ship its product to China. So if this action were to capture . . .
There’s a lot of ifs in this but I guess my message would be, we
want to ensure that our companies have the freest trade
possible. If our companies are being penalized, we will work
with the company, with our federal government, and try and
find solutions for them.
Mr. Wotherspoon: — Okay. We appreciate that it’s on your
radar and something important to track as well. Just there’s a
few moving parts to this piece and that’s important. Is the
minister aware when the non-compete with Domtar runs out?
Does he have any concerns that this process seems to be
evolving possibly fairly slow — not the China relation piece but
the overhaul of the mill? Is it possible that if that doesn’t occur
and if it’s slow walked, can they basically go past that point
with the non-compete clause, and then can they then operate in
a more traditional fashion?
Hon. Mr. McMillan: — My understanding is that what I’ve, in
discussions with Paper Excellence directly and with other
comments they’ve made, is that thus far they’ve been interested
in craft pulp and that their intention at this point, or with the
discussions I’ve had with them, is that that was the direction
they were going.
Mr. Wotherspoon: — I took it up with the minister last week
as it relates to a company that seems to have a relationship to
the Paper Excellence or the mill anyways and that would be a
company called . . . And I don’t know how to pronounce it
properly. I can spell it first. I-y-i-n-i-s-i-w, Iyinisiw. And my
question to the minister would be if he can maybe speak to who
this company is. What’s their genesis and what’s their
relationship to Paper Excellence? Are they a subsidiary or do
they have a relationship, a business relationship with Paper
320 Economy Committee May 7, 2013
Excellence?
Hon. Mr. McMillan: — I’d like to start off just clarifying my
last answer that I don’t want to get craft pulp and dissolving
pulp mixed up, that my understanding and in the meetings I’ve
had with them, they have been fairly consistent that they want
to move forward with developing the mill in a dissolving pulp
mill. So I wasn’t sure at the end of my comment whether I’d
dropped in craft where I wanted dissolving or not but . . .
Mr. Wotherspoon: — You took my question away from
question period tomorrow.
Hon. Mr. McMillan: — In regards to the company that the
member opposite referenced, my understanding is that they are
currently staffing. They’ve applied, advertised for several of the
positions. They’re looking to staff it up fairly dramatically over
the summer. And that Paper Excellence has purchased mills in
British Columbia, in Alberta, in Saskatchewan — as I
mentioned earlier, we’ve got the two — and some even in
Atlantic Canada. And they’re looking for having a subsidiary
and that is what my understanding of this company is. It’s a
subsidiary of Paper Excellence which specializes in the
refurbishment of mills.
I think it’s quite a good story for Saskatchewan that they’ve
chosen P.A. to be the headquarters at this point. And from this
site, this crew that they’re putting together will refurbish the
P.A. mill and then potentially will be utilized to work at their
refurbishment of the other assets which they’ve purchased
across Canada over the last several years. So I think it’s quite a
good news story for P.A. and for our province that we would be
the headquarters of a highly skilled crew of this nature.
Mr. Wotherspoon: — And certainly the individuals that can
fulfill that work and the companies that can fulfill those works
certainly exist within that region as well right now. So I
appreciate you putting on the record that this company is a
subsidiary of the Indonesian company, Paper Excellence.
There’s certainly questions within the community.
Now has the minister had any discussions or has he had it
brought to his attention, or through his ministry to anyone, a
desire or interest to look to foreign temporary workers to fulfill
some of the labour needs for the mill or within the subsidiary
that we’ve discussed?
Hon. Mr. McMillan: — I would say in a general sense, many
of the forestry, mining, oil and gas companies I meet with, one
of the biggest challenges that they always put forward is that
Saskatchewan has, as they recognize and we do, the lowest
unemployment rate in the country. And that’s a good thing on
many fronts, but it creates a challenge obviously when projects
are moving forward. And they I believe have raised with me
that finding the right employees is something that is a big part
of building out their capacity and a challenge that they have
ahead of them as many projects are.
In regards to specific programs or specific immigration, those
would be better questions for Minister Boyd, as he is the
Minister Responsible for Immigration. We don’t have the
details in regards to those specifics.
Mr. Wotherspoon: — And what I’m hearing from the business
community up there who now once fulfilled these contracts to
the mill, who are now I guess will be potentially replaced by
this new subsidiary of the Indonesian company, they feel they
have a fairly strong labour force that can be engaged in this
mill, both that have been engaged in the past but also trades and
technical skills. And they’re also very committed to building
out that employment and new economic opportunities with
many throughout the region that maybe haven’t been in the
past. And to just to relay that the business community is quite
adamant that solutions lie within that region for employment
and that the technical and skilled, trained workers are there and
that it would be a great disappointment, an economic mistake,
arguably, to overlook the region, overlook the workers in
Saskatchewan to look for a very short solution possibly with
foreign temporary workers in this important investment in the
region. But you’ve said it’s best to take it up with Minister
Boyd and always pleased to do that.
Is the minister aware of a desire or a plan or a discussion around
the mill, Paper Excellence looking at building out a residence
structure, a place to house workers on site?
Hon. Mr. McMillan: — In regards to their detailed plan on
how they want to move the project forward, those are internal
company matters. And no I haven’t been in discussion of that
granular detail of the project they’re looking to move forward.
Mr. Wotherspoon: — Okay. Just some of the discussion that,
throughout the region, municipal leaders and business leaders
are talking about and certainly may be highlighting some of
their concern around that the region’s workforce, the provincial
workforce, the region’s businesses may be overlooked by this
Indonesian company and looking for what they’re suggesting is
a short-sighted approach to foreign temporary workers.
I understand there is an old building that they looked to possibly
refurbish and to turn it into some sort of a camp. I understand
that when they got down to the details of what that would be
required by way of health and safety and everything else, that it
was maybe cost-prohibitive. But there’s a lot of questions up in
that region. And it’s an important mill. That activity’s important
to the region, and there’s a lot of important employment that
can be fulfilled through the region.
I’d be interested in shifting gears just a little bit to an issue that
I don’t know or have a great history on but something that some
folks that have engaged me, an interesting file — and I know it
goes back to decisions while the party I represent was in
government, but it’s more of a looking at where we are now and
where we’re going — and that’s the potash restricted drilling
areas around operations. And in essence, if I understand this,
this is where in 1995 by concerns around water and the impacts
of course on the mines, the integrity of those mines, there was
lands that were laid out, 72 sections I believe certainly around
the Rocanville area — I believe around other mine sites — that
same 72 sections that mineral rights holders were prohibited
from utilizing those mineral rights on sort of a no-drilling zone.
My question to the minister, now they . . . you know, that was
done in response to some real concerns, I suspect, at the time as
it relates to water into those mines, something that’s still a
consideration certainly of the industry. This question to the
May 7, 2013 Economy Committee 321
minister: is this issue on your radar? Are you doing any review
of this process, the fairness of those mineral rights holders that
have those mineral rights, in essence, in limbo, certainly
without any compensation?
[21:15]
Hon. Mr. McMillan: — In regards to the PRDA [potash
restricted drilling area] issue, as the member opposite states,
this goes back several years. And it’s an issue around multiple
. . . restricting the rights for oil drilling where there’s a potash
mine to ensure the integrity of the . . . flooding doesn’t
compromise safety or the investments that are currently sunk.
The splitting of those rights and issuing them separately, we
have not done that since 1995. Since then if a potash property
wants to move forward, they have to secure all rights, all oil and
gas, to ensure that there will be no conflict.
As far as the situation that happened pre-1995, that is, as
members will likely know, is a subject of a lawsuit currently
that is being brought forward against the Government of
Saskatchewan. That being said, our officials have met with the
group that is affected by this as recently as a couple months
ago. I know that the potash industry is interested in finding
solutions to it. This group certainly would like to find solutions,
and we would as well. So I think this is historic, but ideally I
think all parties would like to find a solution.
Mr. Wotherspoon: — Listen, I appreciate the answers on this
front. I understand that possibly the lawsuit may not be
anymore. I might be wrong on that. I’ve had some expressions
that that may not be continuing. But you know, regardless it’s a
circumstance that needs to be resolved. And I’m glad that the
minister has referenced that the potash industry is interested in
resolution of this as well because it does speak to the stability of
that industry as well, and clear terms of engagement. And
certainly I can understand the question around fairness for a
mineral holder who has had their activity, you know, effectively
in limbo with no ability to benefit from some of the rights that
they’ve owned or purchased or had passed along to them.
So I’ll leave it, I’ll leave that there. Certainly the ministry will
probably be doing some follow-up as it relates to the lawsuit
and whether it still exists or not. Regardless of that, I’ll take the
minister’s statement here at face value, that there’s interest in
resolving this matter and working with the sector, working with
the mineral rights owners, the landowners. Of course making
sure that all decisions are sound from a geological perspective,
from an environmental perspective, sound from a perspective of
protecting those mines but respectful and fair to all within the
region, certainly that includes the landowners, the mineral
rights owners. So we’ll continue to track that file as we move
forward. But thank you for that answer.
Maybe switch gears just a little bit here and take a look at,
we’ve looked at some of the commercialization or the
companies that your ministry has been involved with starting
up, one of them being CVI [Climate Ventures Inc.] back a few
years back. And I would just, I guess, look to the minister.
There’s certainly some confusion from your recent comments in
the Assembly as it relates to, I believe, suggesting — maybe
I’ve interpreted these wrong — but I believe the suggestion was
that your ministry didn’t play a role in starting this company up,
CVI. You know, of course, I can reference some of the orders in
council or otherwise. We can get into that.
But maybe if the minister can just clarify, how he figures his
ministry — that funded, provided dollars for this start-up —
wasn’t involved in the start-up of that company.
Hon. Mr. McMillan: — Mr. Chair, I appreciate the forum to
have this discussion. It seems that in the Chamber in question
period, with the minute time frame, the member asking the
question sometimes asks three questions in a minute, and it’s
tough to explain one answer in the same time frame. So I think
this is probably a better venue.
In regards to the order in council that the member speaks of, the
university asked the Ministry of Energy and Resources at the
time if they’d be willing to help fund a study. The university
felt they were world experts in carbon sequestration, in the
technologies around enhanced oil recovery in regards to
utilizing carbon. And they felt that they had some very saleable
research that they wanted to commercialize.
The order in council that we’re speaking of was for, I believe,
$100,000. It was a grant to the university to enable them to do
the research on how they could commercialize their carbon
research. I believe that in that order in council, attached to it
was the agreement that was entered into by the Ministry of
Energy and Resources at the time and the university. In that
contract, in that agreement between those two parties, it spelled
out the expectations and the deliverables and who would benefit
and what the work would be. And it really was a report for the
university on how to commercialize their carbon research. Their
work was done. The report was delivered to the university and
our involvement ended at that point.
My understanding is . . . And on the other side is the
university’s interest in commercializing their research. That is
something universities do, certainly around North America and
more broadly. But our involvement was purely in enabling the
university to do some work on how they could commercialize
the technology that they had developed.
Mr. Wotherspoon: — Well the request, the order in council is
pretty specific. And its for funding Climate Ventures, the
company that’s been in question and in discussion for the better
part of a year. And certainly the government, I suspect, has
known of the concerns and allegations for many years previous.
So I guess I’ll just go back. Why did the minister suggest to the
Assembly that Energy and Resources didn’t play a role in
funding this when it’s clear, as you read through the whole
application here, the whole agreement and as well as the order
in council, that the dollars are from the Energy and Resources
to initiate or start this company up? It’s clear what government
was trying to achieve with . . . Through the agreement it states
what deliverables they were looking for. And I know through
some of the follow-ups as well, the audits have all referenced
that the Government of Saskatchewan funded the start up of this
company. So I look to the minister as why he would have
suggested that his government didn’t play a role in starting this
up.
322 Economy Committee May 7, 2013
Hon. Mr. McMillan: — I think that the step that, the piece of
the puzzle the member needs to put together, is we funded the
university to do a study on how they would commercialize their
carbon research. The proposal they put forward was that they
would call this commercialization vehicle Climate Ventures.
The report was done. It was delivered to their business liaison
officer at the time, and the university then was responsible for
what they did.
The company that the member opposite speaks of of a similar
name, Climate Ventures Incorporated, I believe it was an IT
[information technology] company. It was a company that had
software and I believe hardware that it contracted. It wasn’t a
commercialization of carbon research company to my
knowledge. But our commitment to the university, our contract
with the university was for $100,000 to help them develop a
plan how they would commercialize the research they had. And
those are two very different things.
Mr. Wotherspoon: — Your ministry at the same day
authorized the cabinet, authorized by way of order in council,
$50,000 to the university for . . . I’ll just read it:
It’s deemed desirable and in the public interest for the
Ministry of Energy and Resources to enter into an
agreement with the University of Regina under which the
Government of Saskatchewan’s liable to make
expenditures in the amount of 50,000 for the purpose of
funding the office of energy and environment from April
1st, 2007 to March 31st, 2008.
My question would be, how does this OC [order in council],
which is on the same day as the other OC which is numbered
119/2008, which clearly funds Climate Ventures, how do the
two, how do the two connect? Or what’s their relationship?
Hon. Mr. McMillan: — Could the member restate the dates
that he referenced just a moment ago?
Mr. Wotherspoon: — Yes. The order in council authorized in
cabinet was for March 6th, 2008. And that’s order in council
117/2008. And then the other one is the same day, and it’s order
in council 119/2008.
[21:30]
Hon. Mr. McMillan: — And the $50,000 order in council was
to fund the office of what? And from what dates?
Mr. Wotherspoon: — It states a period which is interesting in
itself, is that it funds from April 1st, 2007 to March 31st, 2008.
Now obviously this is past the date of April 1st, 2007.
Hon. Mr. McMillan: — The order in council that the member
speaks of is from a date that was obviously before our
government was elected in the November 7th, 2007 election. As
the member will know that often commitments are made by
governments, likely at that point, well obviously at that point, a
commitment was made by the NDP [New Democratic Party]
government in early 2007, possibly in the budget of 2006-2007,
and that the government that was elected then fulfilled the
commitment made by the NDP government of the time. So if
the member has a specific question as to the commitment, we
could get back to him as to what the then government
committed to at that time that was being fulfilled. We obviously
don’t have that information with us tonight.
Mr. Wotherspoon: — Yes, what I’m interested in is of course
. . . The one order in council for the $100,000 from your
government on March 6, 2008 is very clear spelling out that it’s
funding Climate Ventures, the creation of Climate Ventures.
This take-to-market entity that it describes, the one that’s been
in question for some time. The other order in council just is
simply on the same day — interested in that range of dates and
what it was for and if there’s any relationship to this other order
in council as well.
So I’d appreciate the information that could be received on the
order in council that I referenced around the $50,000, but as it
relates to the creation of CVI through order in council. I guess
my question to the minister is of course to . . . I would suspect
to fulfill requirements of this order in council there would be a
report that would be sent back to the provincial government.
That report, has the minister reviewed that report?
Hon. Mr. McMillan: — I guess to the preamble to the
member’s question on is there a coincidence between the
fulfilling of an obvious commitment from the former
government — the NDP government from the 2006-2007 time
frame — that that OC went through on the same day as the OC
in regards to enabling the university to do the study on how
they would commercialize their carbon research, we can
endeavour to find out what the original commitment was, what
the reporting requirements of that initial agreement was that
was fulfilled on that date.
In regards to the study that the university completed on how
they would commercialize their carbon research, there was a
report as to how they could go about commercializing their
research. As I said in my previous answer, it was I believe
stated in the order in council and the agreement that that would
be the property of the liaison — the corporate liaison officer of
the university. I believe we did get a copy of that report
prepared for the liaison officer and I think that we were satisfied
that it spelled out the possible commercialization avenues that
the university would have.
Mr. Wotherspoon: — But as far as the report to fulfill the . . .
The Acting Chair (Mr. Hutchinson): — I’m going to
intervene here for just a moment, members. Certainly the
primary purpose of the estimates meetings in my understanding
is to concentrate on elements of this particular fiscal year’s
budget, and while it’s traditional to allow a considerable
amount of latitude, it seems to me that we’re spending a lot of
time talking about budgets previous, and no connection at all
has been made between those budgets and what’s actually in the
current budget. So I’d ask that a direct connection be made
between the historical material that we’re now considering at
great length and the current budget, or move on to questions
pertaining more particularly to the current budget.
Mr. Wotherspoon: — So I guess where it connects is that
there’s been this flow of dollars, and it wasn’t just in the 2008
year. This is simply where this government initiated the start-up
of CVI with the funding of using taxpayers’ dollars, and we
May 7, 2013 Economy Committee 323
have the order in council. So the question was around the
reporting back to government. Why it’s important is, of course,
that that entity then has gone on to be alleged of some
significant matters — significant conflicts of interests,
allegations of waste of public money, and relationships with
other companies as well that are contracting with government,
continuing to this fiscal year.
So just trying to lay an understanding of the, I guess the genesis
of the start-up of this company that this government started up,
and just trying to follow it through to the current contracts that
it and some of the companies that it has I believe a relationship
with, a business relationship with, that are now still doing
business with this ministry and I believe the PTRC [Petroleum
Technology Research Centre]. And certainly it involves
individuals that are involved in this minister’s portfolio to this
day.
The Acting Chair (Mr. Hutchinson): — If I understand the
mandate correctly, we would need to show a direct connection
between historical matters and elements of this particular
budget. Do the investments that were made earlier have a direct
connection with specific dollar amounts contained in this year’s
budget from the ministry?
Mr. Wotherspoon: — I would ask the question then, as it
relates to Climate Ventures, the initial start-up of this
government and partnership with others and the individuals
who have been identified with conflicts of interest that were on
Climate Ventures, what related companies can the minister
identify that either have contracted or continue to contract with
government proper, his ministry, or agencies under his purview
such as the PTRC or the ITC [International Test Centre for CO2
Capture] or certainly IPAC [International Performance
Assessment Centre for geologic storage of CO2] is the one’s
that’s been of large discussion.
And one example would be a company called ClimbIT, I think
is how you pronounce it, and I believe there’s a direct
relationship, similar individuals involved, one individual I know
that’s alleged of a significant conflict of interest who’s
continued to receive dollars from this government and as well
from the PTRC, where there’s actually newer order in councils
that have been extended.
So my question would be, as it relates to these companies in
question and as it relates to the individuals that have had
conflicts of interest raised with their involvement, I guess if the
minister could just clarify, what companies are receiving
dollars, what conflicts of interest he’s identifying throughout his
ministry? Maybe it’s a contract with ClimbIT that he could
clarify or with various agencies or ministries or with the PTRC,
or maybe it’s individuals that have been identified with
conflicts of interest.
Hon. Mr. McMillan: — I would say a bit in regards to the
relationship of relevance of the company that the member
opposite questions to this year’s budget or to any year’s budget.
I would say there is none. We’ve funded the university on
commercializationing of research. He’s talking about an IT
company. The two are not related and there would be no
relation to that year’s budget nor the current year’s budget.
In regards to any contract with individuals, if the member
would name ClimbIT, I will check if ClimbIT is currently
contracted by any of the . . . of our ministry. If he has any other
names in particular, we’d be pleased to do that work as well.
Mr. Wotherspoon: — Well maybe specifically some of the
individuals that were identified through the Meyers Norris
Penny audit and investigation. Does he have concerns as it
relates to some of those incorporators and proprietors and
current . . . I would suspect that when you have, in the end . . .
We know it’s been raised that millions have been wasted. I
would hope that government would be doing a full review of its
partners and related companies and individuals with conflicts of
interest.
So looking for some statements and, you know, on the current
year as it relates to the minister’s actions on this front and
reviews that he might be doing into years past but also dollars
that might be flowing this year. And as far as the government
not, you know, I still . . . The minister I think is maybe trying to
be too cute by a half on this one, where it’s pretty clear . . .
The Acting Chair (Mr. Hutchinson): — The member will use
appropriate language and refrain from remarks of that kind. I
expect it to change immediately.
Mr. Wotherspoon: — The minister . . . Actually I wasn’t
trying to be certainly unparliamentary with my language at all.
So the minister seems to not be . . . is trying to redirect or
deflect where some responsibility lies. And there is a direct
investment into CVI, and certainly by all the audits that have
been done by the various organizations and audit companies
like Meyers Norris Penny have identified clearly that this was a
company that was started with monies of the taxpayers and
through the provincial government, through this order in
council.
So I think we can move on from that debate and now move on
to, I guess, more current considerations as to what contracts
might be at play, what dollars are flowing to individuals that
have been identified with potential conflicts of interest and what
sort of review this minister is leading.
Hon. Mr. McMillan: — In regards to the ClimbIT company
that the member requested information on, we know of . . . the
contract is not through my ministry but through ITO
[Information Technology Office]. But it is engaged on the
PRIME project, which is an Energy and Resources project
redeveloping our processes and software around the Energy and
Resources computer systems.
So through ITO, one person from ClimbIT was employed. The
call-out, a competitive process through ITO, was engaged in.
The call-out went out in December of 2009. The work
commenced March 2011, and it’s one person. It’s ongoing at
this point, and as I said earlier, it was a competitive process at
that time. If the member has any questions of individuals or
companies that we could provide information on, we’d be
pleased to.
Mr. Wotherspoon: — It says one individual. Could the
minister name that individual?
324 Economy Committee May 7, 2013
Hon. Mr. McMillan: — He is a SharePoint administrator. As
opposed to naming a citizen publicly, I could provide the name
to the member. If he would still request me to name him
publicly, I think that I would be willing to, but out of respect for
people working for the Government of Saskatchewan, I’d be
pleased to provide that name privately at this time.
[21:45]
Mr. Wotherspoon: — Sure. I’d appreciate that name and then
any — and you don’t need to put it onto the record right now as
well — any individuals that have been employed during that
time, throughout this contract through till now with ClimbIT.
So anyone else that’s been employed by ClimbIT. And
respecting that I’ll receive that, we’re not placing it onto the
record here right now, but not being bound by any
confidentiality into the future.
So I have one name here. Is there any other individuals that
have worked in ClimbIT in the fulfillment of this contract?
Hon. Mr. McMillan: — There is one other that at the
commencement of the contract, again a name that I don’t think
the member would recognize, but I would provide him with that
one as well. The contract has been ongoing with one position.
The name I just provided him is the current. I can also provide
you with the initial one as well.
Mr. Wotherspoon: — That’s appreciated. I’d also appreciate if
the minister can provide — and he may not be able to do it just
here and now — but a copy of the contract entered into with
ClimbIT at that point.
The Acting Chair (Mr. Hutchinson): — Before the minister
continues, I have a question that I would like to get answered
from either by himself or his officials. Are there any dollars in
this year’s budget for the ministry that we are considering this
evening that relate directly to any of the companies or
individuals that have been named so far?
Hon. Mr. McMillan: — The PRIME project which we’re
currently in discussion with is a current project. The contract
that we’re currently discussing is ongoing, so this one does fall
within this year’s budget.
In regards to the contract under discussion here on the PRIME
project, as I stated earlier, it’s a contract with the ITO and
ClimbIT that they did through a competitive process. ITO then
bills our ministry for that work and that’s how the relationship
is. So there’s no direct, there is no contract between Ministry of
Energy and Resources and the company in question. We can
request of ITO whether they’d be willing to release that contract
and, if so, we’d be pleased to provide it. The member may also
wish to ask that question of that ministry as well but we will
endeavour to do that work.
The member also asked if there were any contracts with
ClimbIT in regards to other agencies in which we fund. The
member will know that we are a funder of the PTRC. We’re not
their major funder; we’re one of many funders. They’re largely
an industry-driven board, but we have one seat on that board.
And my understanding is that they published a contract on their
website about a month ago, possibly a little over a month ago,
of a contract that they in fact had with ClimbIT. Again, we’re a
funder of the PTRC, but we are of the understanding that they
made a contract public of this nature.
Mr. Wotherspoon: — No, and I’ve raised it because it’s . . .
certainly begs to question. Now could the minister state the
current incorporators of ClimbIT or past directors of ClimbIT?
One of the individuals with an alleged conflict of interest
through the audits has been a gentlemen, Mr. Henry Jaffe. Is he
still a proprietor of ClimbIT?
Hon. Mr. McMillan: — Mr. Chair, we don’t know with
certainty who the directors of this company is, or many
companies specific to this company. We don’t have a contract
with them. We have one of their contractors on site through the
ITO, but I would expect that you, through the corporate
registry, anyone could find the proprietors of a company that’s
incorporated. But that’s not the type of information that we
would have for this or any company of this nature.
Mr. Wotherspoon: — The concern being that this Mr. Henry
Jaffe has been highlighted through a lot of reports to
government and to IPAC board, the board of directors, with a
concern around conflicts of interest, but also the entities that
he’s been involved with have had allegations of unethical
behaviour — this Climate Ventures, of course, that was started
by your government — also, you know, fairly straightforward
allegations of a waste of significant dollars, of taxpayers’
dollars.
So I guess I look to the minister. What have you done to, I
guess, review your comfort with your government continuing to
extend dollars to operations that an individual that has had so
many identified concerns raised? Why do you continue to flow
dollars in the direction of his companies?
Hon. Mr. McMillan: — The contract that’s currently in
discussion, as we’ve stated earlier, we have a contractor on our
site from ClimbIT. We have a major project redevelopment of
the PRIME project moving forward. It’s a multi-year
redevelopment of our software and business processes around
energy and resources, around oil and gas.
Through this project we utilize many consultants, many people
with very technical skills. The ITO is the arm of our
government that has expertise in this regard. They have a very
prescribed procurement policy. It is a very competitive policy
and very transparent, as it should be. And I believe that they put
out a competitive bid process that’s very transparent, and they
reward the proponent of that bid that best meets the requirement
and is most competitive. And I think the people of
Saskatchewan expect any contract to have a very transparent
and competitive process. And the one contract we have that has
flowed through the ITO, I understand, went through this
process.
Mr. Wotherspoon: — But reports to your government have,
dating back many years have stated significant concerns as it
relates to allegations of conflicts of interest and waste of
taxpayers’ money and this individual. In fact it’s raised
concerns basically with being involved with any entity that that
individual that’s been named is related to.
May 7, 2013 Economy Committee 325
My question is, why your government has either continues to
fund those dollars, with direct reports and concerns that have
been raised directly to your government, or what review have
you done of this individual that is still at the centre of the CVI
questions and the alleged waste of millions of dollars?
Hon. Mr. McMillan: — If the report that the member is
asserting that our government has received, if he’s speaking of
the Meyers Norris Penny report that was commissioned by
IPAC-CO2, I believe that was commissioned in 2011. It was a
report to their board that we had members on. We didn’t have
the majority of members, but it was not a government report.
And my understanding was that the board didn’t release that
report publicly, and it never did get released until just months
ago.
So in 2011, I believe, that report was delivered to their board,
the IPAC-CO2. The call, the public process that was entered
into by ITO, was 2009. So those two times, the process that the
ITO went through was 2009. This report the member is
asserting is a government report, which it wasn’t, was 2011. I
would ask him, would he clarify? Is there another report in
which he is referencing?
Mr. Wotherspoon: — There’d be two reports. And of course
the minister would know that government has three members of
the board of IPAC right from the get-go, and so this went to
those members. Now the responsibility of those members is to
represent government and the public in their roles. So certainly
when allegations of this kind are raised, it would be my full
expectation that ministers and government would be briefed,
fully aware of the issue, and responsive to the issue. We haven’t
seen that at all from your government.
The reports that I would identify would certainly be the Meyers
Norris Penny report which has been accessible by your
government for, as you say, many years, something that’s really
only been brought out through leaks and investigation that’s
been in place, but also a report that was brought forward to the
board of IPAC. It’s a document. We’ve talked about it. I’ve
tabled it in the Assembly for you and the other ministers
involved in this venture, and I’m sure he’s . . . Have you
reviewed, Mr. Minister, the report dated March 28th, 2011, that
I tabled in the Assembly?
Hon. Mr. McMillan: — I would remind the member that the
public process for the contractor was taken place in 2009. So
I’m asking, is there a report that predates that to his previous
question? In regards to this report that was tabled, yes I’ve
reviewed the reports tabled in the Assembly.
Mr. Wotherspoon: — I’m glad you’ve reviewed them. Were
you alarmed and concerned when you read the report that had
gone to your government officials a couple of years ago?
The Acting Chair (Mr. Hutchinson): — I’m going to
intervene here. We don’t have a lot of time left, and we’ve
strayed considerably from the mandate of considering this
particular fiscal year’s budget. I would consider any further
questions along that particular line to be out of order, and I ask
that the member change his lines of inquiry to be more
specifically addressing this year’s budget.
Mr. Wotherspoon: — Well the contracted dollars continue to
flow, so it’s a valid question. Back to . . .
The Acting Chair (Mr. Hutchinson): — I will consider
questions in order that relate specifically to the amounts of the
budget and their purposes.
Mr. Wotherspoon: — So the minister’s reviewed the
individuals that have been alleged to have conflicts of interest
specifically from the Meyers Norris Penny report and . . .
[22:00]
The Acting Chair (Mr. Hutchinson): — That doesn’t relate to
the specifics of this budget, and I’ve declared, I’ve declared it
out of order.
Mr. Wotherspoon: — Could I ask the question, Mr. Chair, so
you can make that assessment after that? Can I ask the question,
and then you could assess whether or not it has its place?
The Acting Chair (Mr. Hutchinson): — Certainly.
Mr. Wotherspoon: — So the minister has assessed the . . . read
the report. I’m aware that he would know the individuals with
conflicts of interest that have been identified clearly by
independent investigations or by investigations. Is he concerned
that one of those individuals continues to occupy a lead role at
the PTRC, which is under his purview and out of this fiscal
year?
Hon. Mr. McMillan: — As the members will know, the PTRC
is an agency which has been funded by the Government of
Saskatchewan since I believe 1998. It’s a non-profit agency that
was established as a partnership between the university, the
SRC [Saskatchewan Research Council], and the Government of
Saskatchewan, and I believe the federal government. The
federal government has been the largest funder of the PTRC for
many years. The Government of Saskatchewan has also been a
funder. It is an industry-driven organization doing research into
enhanced oil recovery with a substantial amount of expertise
and knowledge around carbon sequestration, enhanced oil
recovery at the Midale oil field. So with that context, we have
funded the PTRC.
In this year’s budget, we have allocated funding towards them
again, to them again. We do have, as we do with all agencies in
which we fund, whether they are direct government agencies or
not, we have a very high expectation of fiscal responsibility, the
type of fiscal responsibility that we think is acceptable for
spending GRF money on. And we need to ensure that all our
agencies that we fund also has that level of scrutiny that we
think is appropriate.
Mr. Wotherspoon: — My question is . . .
The Acting Chair (Mr. Hutchinson): — The three hours that
we have allocated for this part of the discussion have now
elapsed, so I don’t think we’re able to entertain any further
questions and we need to proceed with business.
Mr. Wotherspoon: — Unless the minister fields the question.
Unless it’s the will of the committee to go on with a few more
326 Economy Committee May 7, 2013
questions.
The Acting Chair (Mr. Hutchinson): — The agreement as I
understand it was three hours.
Mr. Wotherspoon: — You have flexibility that a committee
has. We certainly have that flexibility I mean unless members
don’t care to have a few minutes of questions. I’ve chatted with
the critic and she’s certainly comfortable with a few extra
questions.
Hon. Mr. McMillan: — I’d be pleased to answer this question
for the committee member.
The Acting Chair (Mr. Hutchinson): — Certainly.
Hon. Mr. McMillan: — I guess in this year’s budget we are
again, have allocated funding for the PTRC. We have seen the
work they’ve done over the last several years. We need to
ensure that they have appropriate financial oversight and
controls in place. I understand that the Virtus group is the
auditor of record for the PTRC, that PTRC has, on a regular
basis, asks their auditor: are their financial oversights
appropriate for an organization of their type and their size? The
Virtus group has reported back that in fact they are consistent
with other organizations of their type and of their size, that the
spending oversight and requirements are appropriate for the
type of work that they do.
As I said, they’re a non-profit. And they continue to do research
here in Saskatchewan. As a government we need to ensure that
any organization that we fund, non-profit or not, has the
appropriate financial controls in place, and that will not be
changing.
With that I’d like to thank the committee members for their
time tonight, for their questions and their considerations of the
estimates. So thank you very much.
Mr. Wotherspoon: — Thank you. Thank you to the minister
for taking time with us. Wouldn’t have minded a little bit more
time, but respectful of the fact that the Water Security Agency
behind us as well lined up for questions. Thank you to officials
for being here and endeavouring to provide answers here
tonight and providing the information that has been committed
to here tonight. So thank you to all the civil servants and the
officials across the ministries and agencies that are involved,
and thanks for the time.
The Acting Chair (Mr. Hutchinson): — It’s time now to
consider the votes. We will proceed first of all with vote 23,
Economy. And we’re looking at first of all central management
and services, subvote (EC01) in the amount of $36,471,000. Is that
agreed by committee members?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried. Second,
mineral land resource policy, subvote (EC06) in the amount of
$12,157,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Next
petroleum and natural gas, subvote (EC05) in the amount of
$10,267,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Revenue and
planning, subvote (EC04) in the amount of $23,992,000, is that
agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Economic
development, subvote (EC12) in the amount of $13,759,000, is
that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried. Tourism
Saskatchewan, subvote (EC14) in the amount $15,172,000, is that
agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried. Next is the
labour market development, subvote (EC13) in the amount of
$168,452,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Enterprise
Saskatchewan, subvote (EC19) in the amount of zero dollars.
We’re doing this just for information purposes only, and there is
no vote required. We simply need to read it into the record. Same
for the amortization of capital assets in the amount $3,013,000.
This again is for information purposes only. A vote is not required.
And Economy, vote 23, the total is $280,270,000. I now need to
ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for the
Economy in the amount of $280,270,000.
Ms. Jurgens is in agreement. Yes. Pass the resolution. Is it carried?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Indeed it is.
General Revenue Fund
Lending and Investing Activities
Economy
Vote 174
The Acting Chair (Mr. Hutchinson): — Okay, we have just a
couple of more before we get to that point. Vote 174, Economy,
lending and investing activities, loans under The Economic and
Co-operative Development Act, subvote (EC01) in the amount
of $4,825,000, is that agreed?
Some Hon. Members: — Agreed.
May 7, 2013 Economy Committee 327
The Acting Chair (Mr. Hutchinson): — It’s carried. Loans
under The Economic and Co-operative Development Act, The
Northern Economic Development Regulations, subvote (EC02)
in the amount of zero dollars, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s a bargain. Loans
under The Economic and Co-operative Development Act,
subvote (EC03) in the amount of zero dollars, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Pretty easy. Carried.
And finally, Economy, vote 174 in the amount of $4,825,000. I
will now ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for
Economy in the amount of $4,825,000.
Mr. Bradshaw.
Mr. Bradshaw: — I so move.
The Acting Chair (Mr. Hutchinson): — And I’ll call for the
resolution. Is that carried?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Indeed it is. Yes. I
recognize the minister for closing comments.
Hon. Mr. McMillan: — Thank you very much. I’d like to,
before I make a closing comment, I committed to the member
from Athabasca a little bit of information that we were able to
find for him. We will still endeavour to get the maps that he had
requested to the committee. But in regards to taking out a
mineral claim, the fee for claims is 60 cents a hectare with a
minimum of $300 charged for that fee. Then once you have a
claim, you have annual expenditures to hold any particular
claim. In year 1, your expenditure can be zero. But for years 2
onwards, it’s $15 per hectare of work of drilling or of
development work to keep that claim active. And that I think is
the information that the member had asked for. If the member
wants any further follow-up, he certainly can follow it up with
myself.
With that, just thank you for the committee’s time tonight, and
thank you for my officials and the prepared nature in which
they came to these estimates. So thank you very much.
The Acting Chair (Mr. Hutchinson): — Just before we
proceed to the next part of the evening’s agenda, I’d like to
have a very brief break to allow members to get to the
washroom. Let’s reconvene as close as we can to 10:15, please.
[The committee recessed for a period of time.]
[22:15]
General Revenue Fund
Water Security Agency
Vote 87
Subvote (WS01)
The Acting Chair (Mr. Hutchinson): — Thank you, folks. We
are now officially reconvened, and we’re going to resume or
consider the estimates for the Water Security Agency. This by
way of information is vote no. 87, subvote (WS01). I’d like to
welcome the minister and his officials. And, sir, you may want
to introduce them.
Hon. Mr. Cheveldayoff: — Thank you very much, Mr. Chair.
Good evening to committee members. I appreciate having the
opportunity to have you consider the estimates of the Water
Security Agency.
I’m joined this evening by Wayne Dybvig, the president of the
Water Security Agency, to my right. Bob Carles is to my left.
He’s the vice-president, corporate services. Susan Ross is here,
vice-president of legal and regulatory affairs, in the second row.
Sam Ferris, beside her, is the executive director, water and
waste water management; Dale Hjertaas, executive director,
policy and communications — all with the Water Security
Agency. Also my chief of staff, Jason Wall, and ministerial
assistant Jacquie Klebeck are here as well.
Saskatchewan’s plan for growth includes securing our water’s
future as an instrumental piece to ensuring our province’s
continued growth as well as providing a good quality of life for
Saskatchewan people. To secure our water future, we
committed to several actions: (1) the creation of the Water
Security Agency, (2) implementing the 25-year Saskatchewan
water security plan, (3) implementing the 10-year water
management infrastructure rehabilitation plan. These actions
will play a significant role in supporting our plan for growth.
The Water Security Agency was created in October 2012 to
support the Saskatchewan plan for growth and lead
implementation of the 25-year water security plan. This new
agency improves the water management capacity and service to
individuals, businesses, and communities across Saskatchewan.
The Water Security Agency is an essential part of growing our
province while providing water security for Saskatchewan now
and in the future, which will support the plan for growth.
For the first time ever, this new agency brings together all of the
major responsibilities related to water quality and quantity. The
Water Security Agency brings all aspects of water management
together to provide a one-window approach to serve the citizens
of Saskatchewan.
The Water Security Agency is leading and implementing the
25-year Saskatchewan water security plan, which creates a
vision for the future of water in our province. The plan will
support municipalities, individuals, and businesses as
Saskatchewan continues to grow. During consultations on
development of the 25-year plan, stakeholders expressed very
strong support for the creation of the 25-year water security
plan and the single water agency. There was a strong sense that
water is very important and needs increased attention from
government. Since the announcement of the Water Security
328 Economy Committee May 7, 2013
Agency and the 25-year plan, I’ve had the chance to
communicate with a variety of groups, and they have expressed
their support for the increased emphasis we are placing on water
with the Water Security Agency and the water security plan.
This is the Water Security Agency’s first budget and the first
time as a separate entity to meet with the committee for
consideration of estimates. Therefore I will take a moment to
describe the agency. The Water Security Agency was created by
bringing together the Saskatchewan Watershed Authority and
water-related employees and programs from the ministries of
Environment, Health, and Agriculture. The Water Security
Agency is responsible for management of water quality, safe
drinking water, protection of water quality, reducing impact of
floods and droughts, public policy water management
infrastructure, and information on water supplies.
The Water Security Agency has a number of revenues. The
grant we are considering today from the General Revenue Fund
provides 41 per cent of total revenues. Water-related charges
provide 52 per cent of the revenue. The budget of the Water
Security Agency includes a budget for programs transferred
from the Ministry of Agriculture, Health, and the Ministry of
Environment.
With this budget, the Water Security Agency will be continuing
with the 10-year infrastructure rehabilitation plan with an $11.9
million investment in infrastructure rehabilitation. This work
includes upgrades to the M1 canal, work to restore capacity to
the upper Qu’Appelle conveyance channel, and work at the
Gardiner dam. The Water Security Agency will continue to
support watershed planning and implementation, and its budget
includes $925,000 to support implementation of 11 source
water protection plans.
As we deal with flooding, the importance of keeping channels
clear and ready to handle runoff is clear. That is why the budget
provides an additional $500,000 for grants to local governments
under the water control program. This increases the total budget
to support channel clearing and maintenance of flood control to
some $1.46 million.
As you know, we have had a lot of snow last winter and are in
the midst of a very late runoff. The importance of the work the
Water Security Agency does, and of its network of metering
stations, is highlighted in a year like this. The Water Security
Agency staff are working long hours to ensure communities are
warned of possible flooding and to provide assistance to them
to prepare for that flooding.
Thanks to the forecasts of high flows, reservoirs were drawn
down to create storage, and communities have prepared. The
emergency flood damage reduction program has more than 350
clients, and that number is still growing. Communities,
individuals, and First Nations are receiving technical and
financial assistance to help them prepare for possible flooding
and reduce flood damage. Thanks to the forecasts, many
communities have prepared in advance and are ready for what
the high waters will bring.
Mr. Chairman, I acknowledge the importance of the work the
Water Security Agency does. Its hydrologists, its hydrometric
technicians, engineers, communications, and regional staff are
doing an excellent job in this extended runoff period, and I
would like to at this time sincerely thank them for their
dedication and commitment to the people of our province.
Now, Mr. Chairman, I would welcome comments and questions
from yourself or any member of the committee. Thank you.
The Acting Chair (Mr. Hutchinson): — Ms. Sproule, please.
Ms. Sproule: — Thank you very much, Mr. Chair. And thank
you, Mr. Minister, and certainly thanks to the officials for also
putting in long hours today for the purposes of this committee.
I’ll just start with some questions. I have a document that’s I
believe your financial summary statement for the plan for
2013-14. It has a breakdown of the estimates that were provided
to the committee and to the government in this year’s budget.
And I just wanted to first talk about your staff complement of
220.6. My first question is, how many of these staff are in the
regional services portion of your agency?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. Regional services has a staff of about 60 people across
five offices.
Ms. Sproule: — And has that number increased at all from last
year when it was the Saskatchewan watershed association?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. The number of people technically involved in regional
services is relatively the same at 60, but what we do have
through the reorganization is now 17 environmental protection
officers that are also located in the regional offices. So a total
complement of regional staff is about 77.
Ms. Sproule: — Thank you, Mr. Minister. One of the areas I’d
like to explore a little bit in the short time we have together
tonight is about the work that the watershed is doing with
farmers and stakeholders in rural areas regarding drainage, and
in particular illegal drainage. You know, this is an issue of
concern for many in the province, and certainly we posed
questions last year about the enforcement of the law when it
comes to illegal drainage. So my question is, how many
complaints were filed with the regional offices last year in
relation to illegal drainage?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. And the member is correct that illegal drainage is
certainly an area of great concern for the Water Security
Agency. And it’s an area where we talk to stakeholders. We talk
to municipalities. We talk to SARM, the Saskatchewan
Association of Rural Municipalities, and many share that
concern. We have grouped together the complaints that have
come in over 2011-2012 because most of it relates to the same,
to the water challenges that we had in 2011. And so over the
two years, we’ve had 364 complaints, and 331 have been dealt
with or resolved, so approximately 33 are outstanding.
What was established in 2012 to mitigate the workload
associated with this and the spike in the number of complaints
was the task force that was established. The drainage complaint
task force was established to address the workload, and staff
were redeployed from the western part of the province to the
May 7, 2013 Economy Committee 329
Yorkton and Nipawin offices to assist with the complaint
workload. So that’s how they were able to get so many of the
complaints dealt with in such a timely manner.
Ms. Sproule: — Under The Saskatchewan Watershed Authority
Act, which name is soon to change, there are procedures for
orders for works to be closed that are illegal. Were there any
orders issued last year, or did the authority shut down or close
any works last year?
[22:30]
Hon. Mr. Cheveldayoff: — Thank you very much for the
question. Of the 364 complaints, the vast majority are the type
that are able to be resolved between the parties with some
assistance from the Water Security Agency as a type of a
mediator role, if you like. Twelve were not able to be settled
that way. And most of those were orders, where orders were
undertaken for facilities to be closed.
Ms. Sproule: — I know, Mr. Minister, since I became involved
in this area as a critic, I have had numerous calls from farmers
from across the province with sincere concerns about this
problem. And part of the issue is the enforcement procedures in
the legislation itself, which are very difficult for individuals to
enact. Because the farmer, before they can turn to government
for assistance, basically has to do a number of things himself or
herself before they’re even allowed to approach the watershed
. . . I don’t know what to refer to you anymore. You’re in
transition, but I’ll say Watershed Authority for now. And one of
the things that was mentioned on page 29 of your 25-year plan,
under action area 5.2, which is on this topic, indicates that . . . It
says in the second paragraph that:
. . . inappropriate and unorganized drainage can affect
neighbouring landowners and receiving water bodies.
There is a lack of understanding and appreciation of the
impacts of drainage and the benefits that accrue to the
farmer who drains.
Now just on that point, the calls I’m getting, they’re saying that
the people who are doing this illegal drainage are fully aware of
the impacts, but basically the message to their neighbours: too
bad. And certainly that’s inappropriate. The next sentence
though, I have a question for you. “There are calls for
government to respond to unauthorized drainage with increased
enforcement.” That’s in your plan. Has that happened this year?
Have you increased your enforcement of these illegal actions?
Hon. Mr. Cheveldayoff: — Thanks very much. As indicated in
the water security plan, this is indeed a priority for us and
something that we’re taking very serious. And we are
contemplating legislation or beginning to work on legislation in
this regard. Right now we have very few tools at our disposal.
You know, we can investigate and order closure, but beyond
that we don’t have a lot of tools. And what we’re looking at
through legislation or the creation of legislation is the feasibility
of administrative fines. We’re looking at what other provinces
are doing, especially Manitoba. I’ve had discussions with the
minister in Manitoba, Minister Mackintosh, about some of the
work that they’re doing, and certainly they face some of the
same challenges that we do.
But I should let the member know that, as minister, I get the
majority are very much concerned and against drainage and
illegal drainage. But I do get some people lobbying for the
government to continue allowing what is happening or, you
know, trying to explain the benefits of drainage that might not
be certified or totally legal. So you do have some people out
there that are trying to make that argument in that case.
And certainly, you know, on the floor of the SARM convention
following the debate that took place there, there are people on
both sides of it. But from a government perspective, we
certainly feel that there has to be increased legislation to
discourage illegal drainage, and there has to be teeth behind it
that allows the Water Security Agency in this case to look at a
variety of options to ensure that it doesn’t continue to happen. It
is something that we are looking at. We are looking at best
practices, and there will be legislation forthcoming at some
point in time.
Ms. Sproule: — I was listening with interest to your comment
about those who are advocating breaking the law, and I’m glad
to hear that the authority or the agency will not contemplate
that. And certainly I think last year the minister, previous
minister chose to write a letter asking people, please don’t
drain. But I think for those who choose to do it deliberately, this
sort of letter would not have any kind of impact on people who
are choosing to break the law, and that certainly more teeth and
a more forceful approach from the government is necessary to
stop people from really causing havoc to their neighbours
downstream.
And I’m glad to hear that your agency is contemplating putting
forward legislation for the Assembly to consider and look
forward to seeing that in the near future because this is
something I think that has a significant backload as well. And
every year that goes by, it just gets worse. So I’m pleased to
hear that the ministry and the agency are contemplating stronger
legislation to enforce this problem.
Okay, that’s just a comment. A few other things . . . Boy we’re
going to run out of time here. You indicated that the draw from
the appropriation is around 15.5 million, and that’s 41 per cent
of the revenues. I note that the agency is also receiving almost
$1 million from the Fish and Wildlife Development Fund. What
are those funds used for specifically, or do they just go into the
general pot?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. And I’ll just touch on the previous comments by the
member. We had found that the letters regarding illegal
drainage were helpful. They brought the issue to the attention of
everyone, those involved in the illegal drainage and neighbours
as well. So I think it gave those that were certainly against
illegal drainage a feeling that the Water Security Agency and
the government . . . It was a clear enunciation of where the
government stands on things. And so we found those letters to
be beneficial as we work towards strengthened legislation.
The immediate question, the Fish and Wildlife Development
Fund, it funds staff and project stewardship together. And those
funds we find, though, are used to leverage other dollars as
well, whether it be the federal government or the private sector,
and the joint programs are undertaken. One example would be
330 Economy Committee May 7, 2013
the North American waterfall management plan, which is
money from the FWDF [Fish and Wildlife Development Fund]
funds of the Water Security Agency, and that leverages federal
dollars to enhance the resources that we can put towards plans
like this.
Ms. Sproule: — Those funds that are appropriated from the
wildlife development fund, Fish and Wildlife Development
Fund, is that something that the agency itself decides or is that
basically taken from the fund by the ministry without . . . Like
does the fund approve it or is that just taken by the ministry?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. Funds are taken by the Water Security Agency with
the understanding that they will be used to directly further the
goals of the Fish and Wildlife Development Fund. And
certainly the example that I gave earlier, the North American
waterfowl management plan, it takes approximately $500,000
of the 800,000 in total. So it’s a very large project that is very
well received by the Fish and Wildlife Development Fund.
Ms. Sproule: — Would the ministry . . . would it not be more
appropriate for the ministry just to rearrange the allocation to
the fund so that this $500,000 never goes to the fund directly
and it’s just used for the ministry’s purposes? As I understand
the fund, members are not able to direct this money, so it really
isn’t appropriate for it to be part of the fund.
[22:45]
Hon. Mr. Cheveldayoff: — Thanks very much. We had to
draw in some corporate history here. The way it was set up this
way was back in 2002 by previous ministers and previous
government, and it was defined specifically that the money
would flow this way. And I guess it’s certainly fair to say that,
as I mentioned earlier, the North American waterfowl
management plan has taken the bulk of the money and has
received numerous accommodations as, you know, some would
say it’s one of the most successful management plans in North
America. And that’s not any exaggeration whatsoever. So that
is working well.
But I do have to say, I’ve had some discussions with the Fish
and Wildlife Development Fund members about, you know, if it
can be done a different way, if we’d be open to looking at it
being done — as far as the funding goes — in a different way.
And I’ve left that open. I said if, you know, at a future meeting,
that we could talk about different ways of delivering it, I’d
certainly be open to that. But for the time being now, we’re
staying true to the spirit of that 2002 or prior to 2002 agreement
that was put in place.
Ms. Sproule: — Thank you, Mr. Minister. Just moving on in
your financial summary, I note that there’s almost $1 million of
interest in your budget as an expenditure. What is that interest
in relation to? Are there loans or is that debt that you’re
servicing?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. And the member is correct in her observation on the
interest that is accrued is a payment to service debt that the
Water Security Agency does have. We borrow money on an
annual basis for capital needs, and the GRF pays back . . . the
General Revenue Fund pays an amount equal to the interest that
would be paid by the Water Security Agency. And this is
usually amortized over a 10-year period.
Ms. Sproule: — Thank you. Could you give me just a very
high level indication of the types of capital projects this debt is
servicing?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. And indeed a large portion of those funds are
primarily for the rehabilitation of our network of 45 dams
across the province and, you know, just to give the member an
example, the Alameda dam in the 2013-14 capital plan calls for
some $271,000 of expenditures, and everything from
engineering studies of spillways and upgrades that are needed to
make sure that our dams are in good repair. And again this is
one of the goals of the 25-year water security plan as well is to
take a 10-year intensive look at all of our dams and to ensure
that they are in good repair.
Ms. Sproule: — Thank you. On page 11 of your 25-year plan
under the action area 1.5, climate change adaptation, there’s a
mention made there of the Prairie Adaptation Research
Collaborative as a partnership with various Western provinces.
Does the agency provide any funds or grants to that
collaborative?
Hon. Mr. Cheveldayoff: — Thanks very much. And as the
member has pointed out, the Prairie Adaptation Research
Collaborative is a partnership between the governments of
Canada, Alberta, Saskatchewan, and Manitoba, and we enter
into agreements with the federal governments through NRCan
[Natural Resources Canada]. We have partnerships with Alberta
and Manitoba. We don’t really provide funds. We do provide
in-kind support and are sometimes the administrative body that
looks after the agreements with NRCan. But we find that these
collaboratives work very well. They bring partners together
from across the Prairie region and they’re a good link to the
federal government as well, so it’s something we’re very
supportive of.
Ms. Sproule: — Thank you. That leads to my next question in
terms of research partnerships, and that’s in action area 6.3 on
page 34 of your plan. In there you indicate that the agency is
also supporting the work of the Global Institute for Water
Security at the University of Saskatchewan, particularly in
relation to the South Saskatchewan River. Are there funds being
provided to the Global Institute for Water Security for that
research?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. And indeed we do work very closely with the global
water institute of Saskatchewan, the Global Institute for Water
Security at the University of Saskatchewan, and we’re very
pleased with the co-operation that we do receive.
How it works with the collaboration though is that the institute
would propose a project, and sometimes some funds are given
but they would be very modest in kind — probably less than
$10,000 — or they’d be modest, but we do give some support
in that area. But where the vast majority of the support is
delivered in kind, it is through the expertise of the Water
Security Agency, whether it’s monitoring or other services that
May 7, 2013 Economy Committee 331
can be provided if indeed we feel that the project is worthwhile.
And you know, the institute is led by Dr. Howard Wheater and
he is known as one of the world’s foremost hydrologists and
he’s been a real pleasure to work with.
Ms. Sproule: — Thank you, Mr. Minister. In terms of the
climate change adaptation, I’m just wondering if the agency is
looking at research. You talk about — I’m back to page 11
again — using the latest science to model future water supplies
and develop adaptation options. In the downstream area of Lake
Athabasca, we know that the Clearwater River flows into
northern Saskatchewan from that watershed, and there are
concerns being expressed about the deleterious impact of the
exploitation of the tar sands in northern Alberta. Is the agency
pursuing any research or science to monitor and establish
baseline science so that the deleterious effects of that
development can be measured in terms of the water supply for
the Clearwater River watershed?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. And indeed, the Water Security Agency does have a
water quality monitoring station on the Clearwater River. Its
operation has just been in place for a year now, so we’re just
getting some of the initial reports, and it’s something that will
be of great benefit to us going into the future. You know, this is
something that the Water Security Agency is doing.
Just straying off-topic a little bit here, putting my hat as
Minister of Environment on. The boreal water strategy is
something that’s much larger and covers a vast array of water
bodies across northern Saskatchewan. And that is, you know, a
five-year program that we’re in the second year of, and we’ve
levered a vast amount of private-sector dollars from companies
like Cameco and the University of Alberta and others. So that’s
a very large project taking . . . But specifically to your question,
yes, we are monitoring the Clearwater River.
[23:00]
Ms. Sproule: — Just turning now — near the end here of our
time — to reservoirs. And on page 7 of your 25-year plan you
indicate a need for a new infrastructure for water supply and
including new reservoirs, on the second line of that page:
“Additional water infrastructure, including new reservoirs,
pipelines, and canals may be necessary to secure the water
needed for growth.” And then further to that, at the bottom of
the page — I can sort of double up here — there’s indication
that the Qu’Appelle diversion from Lake Diefenbaker requires
significant improvements for conveyance.
So I’m just wondering what kind of funds are allocated for that
in this fiscal year, and if the minister has any indication about
the sort of long-term costs that the agency’s looking at in order
to ensure that that water supply and the infrastructure’s in
place?
Hon. Mr. Cheveldayoff: — Thanks very much for the
question. On the topic of the new reservoirs, it’s something that
we are looking at down the road. But we’re not looking at it
specifically yet this year because we’re waiting for the water
availability information to all be gathered.
We are looking at spending about $1.8 million to investigate a
new canal in the Qu’Appelle River operation. It’s something
that, you know . . . It’s a very, very important structure and
flow, and we want to make sure that, you know, we are able to
investigate how we can make improvements to it.
Ms. Sproule: — Thank you. It’s interesting, in order to go to
my hometown, I have to drive south. And I go by the
Qu’Appelle diversion every time; I’ve been going for 30 years
now. But just a month ago, I finally went to the other side, to
the Gardiner dam and just took a little drive and had a look.
And I’m looking at the picture on page 26 of the infrastructure
for power there. But that is really one of the most amazing, I
think, man-made feats in our history, is the Gardiner dam, and I
would encourage members to visit that area if they haven’t
already.
On page 26, you are talking about sustainable operation of the
dam and the benefits. And I know this is somewhat in the
future, in terms of federally-owned infrastructure, and I know
the Prairie Farm Rehabilitation Association, I think, PFRA as
it’s commonly known, has all kinds of dam infrastructure that I
believe they’re interested in devolving to the province. So that
will obviously impact the agency’s operations in a significant
way once those are devolved.
What kinds of preparations are undergoing, are taking place
now in order to devolve that infrastructure to the province?
Hon. Mr. Cheveldayoff: — Thanks very much for the question
and the comment. PFRA owns about 35 dams and control
structures in the province. Discussions have been under way
and agreements in place to take five of those structures into
provincial hands. The others are in southwestern Saskatchewan
and there haven’t been any discussions about those. But five
structures that we’re talking about are on the Qu’Appelle chain.
The member mentions a little bit about Gardiner dam and the
magnificence of that area. And you know, I can honestly say, in
what I’ve learned in this ministry and with this agency, is that
the great work that was done by people like Danielson and
Douglas and Gardiner and Diefenbaker was just amazing. We
can only hope that we have the same type of vision that they
had to bring Diefenbaker Lake and Gardiner dam and Danielson
Park and all the work and the great co-operation that happened
between the province and the federal government at that time.
You know, people keep asking if, do we have enough water to
ensure that we can maintain our economic viability? And
because of that we certainly do.
Ms. Sproule: — Thank you, Mr. Minister. And I think, you
know, I have to say I couldn’t agree with you more on that. And
given the hour and the good responses from you and your
officials, there’s so much in this 25-year plan that we could talk
about for many, many hours. But I think, given the time of the
night, and I think that’s it. I’m out of time, or I’m out of time
and I’m out of words. So thank you for your commentary. I’d
like to thank the minister and his officials for all their
forthcoming answers.
Hon. Mr. Cheveldayoff: — Thanks very much to the member
and to the Chair and committee members. To the member,
thank you. Your questions again have been thoughtful and
332 Economy Committee May 7, 2013
provoking, and we appreciate that.
And one thing about the 25-year plan, it’s a living document.
It’s going to be updated every five years. It doesn’t have all the
answers, but we’ll be continuing to solicit members of the
legislature and those outside to help improve that document. So
any suggestions for improvement will be well received. Thank
you, Mr. Chair.
The Acting Chair (Mr. Hutchinson): — Thank you, Mr.
Minister, and officials and committee members. We can
proceed now to the votes. Vote 87, Water Security Agency.
This is the Water Security Agency, subvote (WS01) in the
amount of $15,480,000. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried. I have
to ask a member now to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for
Water Security Agency in the amount of $15,480,000.
Mr. Bradshaw.
Mr. Bradshaw: — I so move.
The Acting Chair (Mr. Hutchinson): — Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. I believe the
officials are free to go now if they wish. If the minister wishes
to stay to listen to the votes on the other estimates for the
Environment ministry budget, you’re certainly welcome to. But
I gather that’s not necessary — your choice, sir.
General Revenue Fund
Environment
Vote 26
The Acting Chair (Mr. Hutchinson): — Okay, let’s proceed
then, shall we. Vote 26, Environment, central management and
services subvote. This is (EN01) in the amount of $16, 906,000.
Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried.
Climate change, subvote (EN06) in the amount of $4,347,000,
is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried.
Landscape stewardship, subvote (EN15) in the amount of
$3,940,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried.
Environmental support, subvote (EN14) in the amount of
$2,927,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. What an
agreeable group you are. It’s fun to work with you. Fish and
wildlife, subvote (EN07) in the amount of $9,808,000, is that
agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Compliance
and field services, subvote (EN08) in the amount of
$16,724,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried.
Environmental protection, subvote (EN11) in the amount of
$39,572,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried. Forest
services, subvote (EN09) in the amount of $12,488,000, is that
agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried.
Wildfire management, subvote (EN10) in the amount of
$60,154,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Agreed. Carried. And
the amortization of capital assets in the amount of $9,061,000,
this is for information purposes only. Apparently no vote is
required; this is just for the records.
And our final one, the Environment, vote no. 26 for
$166,866,000. I’ll now ask a member to move the following
resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for
Environment in the amount of $166,866,000.
Moved by Mr. Doke. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. She’s
working me like a rented mule. Carry on to Agriculture.
General Revenue Fund
Agriculture
Vote 1
The Acting Chair (Mr. Hutchinson): — We’re on a roll. You
know, we could do next year’s budget, have a bit of time.
Okay. Here we are with Agriculture. Vote 1, Agriculture,
May 7, 2013 Economy Committee 333
central management and services, subvote (AG01) in the
amount of $10,766,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — That’s carried. Policy
and planning, subvote (AG05) in the amount of $3,607,000, is
that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Research
and technology, subvote (AG06) in the amount of $27,704,000,
is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Regional
services, subvote (AG07) in the amount of $40,116,000. Is that
agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Land
management, subvote (AG04) in the amount of $8,345,000, is
that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Industry
assistance, subvote (AG03) in the amount of $7,171,000, is that
agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Financial
programs, subvote (AG09) in the amount of $26,478,000, is that
agreed?
Some Hon. Members: — Agreed.
[23:15]
The Acting Chair (Mr. Hutchinson): — Carried. Business
risk management, subvote (AG10) in the amount of
$282,520,000. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried.
Amortization of capital assets in the amount of $2,106,000, this
again is for information purposes only. No vote is necessary.
And finally with respect to Agriculture, vote 1, $406,707,000. I
will now ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for
Agriculture in the amount of $406,707,000.
Moved by Ms. Jurgens. Agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried.
General Revenue Fund
Highways and Infrastructure
Vote 16
The Acting Chair (Mr. Hutchinson): — Highways and
Infrastructure, vote no. 16, central management and services,
subvote (HI01) in the amount of $22,358,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Strategic
municipal infrastructure, subvote (HI15) in the amount of
$35,976,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Operation of
transportation system, subvote (HI10) in the amount of
86,144,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Preservation
of transportation system, subvote (HI04) in the amount of
$141,692,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried.
Transportation planning and policy, subvote (HI06) in the
amount of $3,270,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. Custom
work activity, subvote (HI09) in the amount of zero dollars.
This again for information purposes only. But it does require a
signature. Custom work activity, subvote . . . [inaudible
interjection] . . . Yes we did that one. Sorry, forgot to cross it
out. It’s getting late. Machinery and equipment, subvote (HI13)
in the amount of $5,750,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried.
Amortization of capital assets in the amount of 138,121,000.
This again is for information purposes only. Do we sign that
one? Yes we do.
And finally, Highways and Infrastructure, vote 16, for
$295,190,000. I will now ask a member to move the following
resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for
Highways and Infrastructure in the amount of
$295,190,000.
Mr. Bradshaw so moves, I understand.
Mr. Bradshaw: — I do.
334 Economy Committee May 7, 2013
The Acting Chair (Mr. Hutchinson): — He does. I saw him
move. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried. Her
Majesty’s going to be very busy. How much more of this?
Okay, we’re going to be busy too.
General Revenue Fund
Highways and Infrastructure Capital
Vote 17
The Acting Chair (Mr. Hutchinson): — This is for vote 17,
Highways and Infrastructure Capital. Infrastructure
rehabilitation, subvote (HC01) in the amount of $91,700,000, is
that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried.
Infrastructure enhancement, subvote (HC02) in the amount
$189,110,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried.
Highways and Infrastructure Capital, vote 17 for $280,810,000.
I will now ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums,
which to the extent that they remain unexpended for that
fiscal year are also granted for the fiscal year ending on
March 31st, 2015, the following sums for Highways and
Infrastructure Capital in the amount of $280,810,000.
Moved by Mr. Doke. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried.
General Revenue Fund
Innovation Saskatchewan
Vote 84
The Acting Chair (Mr. Hutchinson): — Okay. Vote 84 for
Innovation Saskatchewan. Innovation Saskatchewan, subvote
(IS01) in the amount $28,006,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. I will now
ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for
Innovation Saskatchewan in the amount of $28,006,000.
Moved by Ms. Jurgens. Is it agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried.
General Revenue Fund
Saskatchewan Research Council
Vote 35
The Acting Chair (Mr. Hutchinson): — Saskatchewan
Research Council, subvote (SR01) in the amount $19,743,000,
is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. I will now
ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for
Saskatchewan Research Council in the amount of
$19,743,000.
Moved by Mr. Bradshaw. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried. While
she’s doing that, I’ll ask the obvious question. How come we’re
doing all of this? Can’t these other folks look after their own
business?
General Revenue Fund
SaskBuilds Corporation
Vote 86
The Acting Chair (Mr. Hutchinson): — Vote 86 for the
SaskBuilds Corporation: SaskBuilds Corporation, subvote
(SB01) in the amount of $8,300,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — Carried. I will now
ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2014, the following sums for
SaskBuilds Corporation in the amount of $8,300,000.
Moved by Mr. Doke. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried.
General Revenue Fund
Supplementary Estimates — March
Agriculture
Vote 1
The Acting Chair (Mr. Hutchinson): — Vote 1 for
Agriculture, business risk management, subvote (AG10) in the
amount of $43,154,000, is that agreed?
Some Hon. Members: — Agreed.
May 7, 2013 Economy Committee 335
The Acting Chair (Mr. Hutchinson): — It’s carried. I will
now ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2013, the following sums for
Agriculture in the amount of $43,154,000.
Whose turn? Mr. Bradshaw. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried. More on
that later.
General Revenue Fund
Supplementary Estimates — March
Highways and Infrastructure
Vote 16
The Acting Chair (Mr. Hutchinson): — Vote 16, Highways
and Infrastructure, operation of transportation system, subvote
(HI10) in the amount of $10,000,000, is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried. I will
now ask a member to move the following resolution:
Resolved that there be granted to Her Majesty for the 12
months ending March 31st, 2013, the following sums for
Highways and Infrastructure in the amount of $10,000,000.
Moved by Mr. Doke. Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried.
Committee members, you have before you a draft of the third
report of the Standing Committee on the Economy. We require
a member to move the following motion:
That the third report of the Standing Committee on the
Economy be adopted and presented to the Assembly.
Mr. Bradshaw so moves.
Mr. Bradshaw: — I so move, yes.
The Acting Chair (Mr. Hutchinson): — Is that agreed?
Some Hon. Members: — Agreed.
The Acting Chair (Mr. Hutchinson): — It’s carried. Now
being approximately 11:30 p.m., it is past the hour of
adjournment. The committee stands adjourned to the call of the
Chair. So I would like to ask a member to move a motion of
adjournment . . . [inaudible interjection] . . . We’ve done that?
We’re good. We just did it. Fair enough. We are now
adjourned, ladies and gentlemen. Thank you so much for your
co-operation.
[The committee adjourned at 23:27.]